Fraud Risk Brainstorming at Tesla Motors

• In Event: Case Studies in Fraud and Forensic Accounting 2

Abstract

This instructional case explores best practices in brainstorming fraud risks. Drawing on published information about Tesla Motors, the revolutionary company behind the popular and highly rated Model S all-electric vehicle, this case encourages students to explore the opportunities, pressures, and rationalizations that might foster financial statement fraud at this company. Students also get to participate in a simulated version of the kinds of fraud risk brainstorming activities required by SAS 99 for audit engagements. In a post-case learning assessment, students demonstrated significant improvement in their understanding of the fraud triangle and fraud risk assessment and indicated that they enjoyed discussing these issues in the context of this company. The Teaching Notes and Implementation Guide offer guidance for in-class discussion of this case.

Author

• Megan Hess, Washington and Lee University