A Case of Misapplied Accountability Principle
Please share your opinion and comments on the following case:
Following corporate accountability principle, when there is fund misappropriation perpetrated by a liaison officer assigned in the Vehicle Registration department of an auto dealership company, up to what level should the financial accountability (i.e. who pays for the loss?) for the said financial loss of the company go up to? Up the level of the CFO only, or up to the level of the President?
1. The President is the wife of the owner of the Company, and thus owns the Company as well.
2. When the CFO joined the Company (10 months ago), he immediately worked towards converting the in-house vehicle registration processing service for customers, to an outsource service provider, thereby eliminating the need for the liaison officers.
3. Immediately upon converting to the new system (i.e. outsourcing the service), the CFO discovered the elaborate fund "kiting" activity of the liaison officers, because there are no more new advanced funds to support the fund "kiting" activity, since the CFO ordered that all vehicle registration service for car-buying customers be processed outsource service provider only (none of which is to be given to former liaison officers).
4. Resulting to the confession of the liaison officer of what he has been doing in the past, and offered to pay back part of the missing funds, as audit has ascertained.
5. The President was the person who personally hired the liaison officer, who has been with the Company for at least six years now.
Again, should anyone else be held financially accountable other than the liaison officer? Or should officers be made to pay the missing funds, and if so, should it not go up to the President's level as well, and previous officers who used to handle the department in past?
The President/owner insist that all persons in the chain of command going up to the level of the CFO should share in paying back 100%, to the company.