Home > Business Fraud, Koss theft > More fallout for Koss

More fallout for Koss

The fallout from the embezzlement at Koss has now affected another business in Milwaukee.

Koss resigns as audit committee chair at Strattec

Michael Koss has resigned his roll as chairman of the Audit committee for this company; as well there has been a shake up for the company that is doing their filings for the SEC,

                In a separate move, Strattec this week said it was dismissing Grant Thornton LLP as its auditor. Koss Corp. axed Grant Thornton in early January.

I am not privy to the inner workings of either of these companies, but as a security professional, I can only wonder if Grant Thornton is really getting the shaft in this whole process, along with American Express, who is the one that reported a problem with Koss in the first place, of which Koss is now suing them for.

What was Grant Thornton responsible for with Koss or even Strattec? It states in the report (linked above) that there is no connection for them being released from Strattec auditing process, but what exactly were they responsible for?

In looking at their website Grant Thornton has more than a few areas that they deal with for Risk Management, but they have an entire Audit department, were they hired as just the audit firm for compliance with the SOX regulations?

They do have an area of the company that deals with Risk Management, but if you do not hire them for this purpose you will not have this aspect of their business, they can notice some things even with their Audit Department but this is all relative to the information that they are given for review.

None of us would be able to tell Koss or any other company that they have a problem if they do not supply that information.

Please remember that the CEO and the Board are the ultimately responsible party for a company to not be the victim of Fraud.

Sue was taking money for many years, and she obviously knew what she was doing and how she was hiding her embezzlement, if she was the one that was supplying the information for Grant Thornton to review do you think that she would turn over the information to the company that could have busted her?

Another weird quote that was in the story (linked above) is that Michael Koss was until “recently” the CFO for Koss, isn’t that the title that Sue had? So what was she since 2004 when they are stating she started to take the money? Is 2004 now considered “recent”?

               Michael Koss, who until recently had been the chief financial officer at the Milwaukee headphone manufacturer founded by his father, will remain a Strattec director and will continue serving on the audit committee, said Pat Hansen, Strattec chief financial officer. He said Koss resigned as committee chairman in early January – the same day that Koss dismissed Grant Thornton as its auditor.

So all of this comes back to the Koss family being responsible for the embezzlement, why did they turn over the ability to handle the finances to someone other than the CFO?

 Sue was the CFO who was the CSO or CISO? Why didn’t the CSO or CISO catch the problems in the business?

More than likely it is a case of Sue not giving the information to the person(s) that needed it for finding this embezzlement out before now.

This is the reason that all business owners need to look at how they are protecting their businesses, you don’t have to have an inside CSO or even have to have a firm to do the ongoing Security protocols, but you need to address your security measures, either internal or externally you as a business need to look at this.

Grant Thornton has stated that they are not in any way responsible for the embezzlement, and I believe them, they were hired to do the audits only, and if they were in any way responsible I am sure that Koss would have already filed a suit against them like they did with American Express.

Any risk professional will  only be as good as the information that is supplied to them, if you are relying on an external professional then you need be sure that all information for your business is supplied for a true and accurate accounting of what is really going on with your business.

What is Michael Koss’ role with Grant Thornton? Or better yet why would Strattec keep Mr. Koss on as a director? Is it because the Koss family owns a portion of Strattec? I don’t know the answers for this, but I would defiantly take a long hard look at any company that Mr. Koss has direct dealing with, he has enough on his plate at his own company he really doesn’t need more things to do than deal with his Family business, and the problems that they are now encountering.

For assistance or more information on protecting your business please visit www.dlbandassociates.com

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