Koss Corp. (KOSS, Financial) filed Amended Annual Report for the period ended 2010-06-30.
Koss Corp. has a market cap of $40.2 million; its shares were traded at around $5.44 with a P/E ratio of 24.7 and P/S ratio of 1. The dividend yield of Koss Corp. stocks is 4.4%.KOSS is in the portfolios of Chuck Royce of Royce& Associates.
· Wire transfers and cashiers checks. Approximately $30,900,000 or 98.1% of the total $31,500,000 of unauthorized transactions from fiscal year 2005 through December 2009 was misappropriated by circumventing the Companys internal controls and other operating procedures for the payment of Company expenditures by using wire transfers or cashiers checks from the Companys bank accounts to pay for personal expenditures. Of the $30,900,000, approximately $8,500,000 was misappropriated by use of these means during 2009. Misappropriations by use of wire transfers or cashiers checks totaled $10,300,000 during 2010. These unauthorized transactions were processed by circumventing the Companys policy that all invoices over $5,000 were required to be submitted and approved by Michael Koss as the CEO, and all accounts payable checks generated from the Companys accounts payable system were signed by the CEO. Moreover, wire transfers were to be used only for authorized transactions including certain inventory purchases and transfers of funds between the Companys bank accounts. Wire transfers for inventory purchases and the recurring expense items required the approval by several employees including authorized Vice Presidents, while the wire transfers between the Companys bank accounts were processed and approved by Ms. Sachdeva and one of the other terminated employees in the accounting department. Ms. Sachdeva, by herself and/or by directing other employees in the accounting department, ordered cashiers checks from the Companys bank accounts to pay for personal expenditures directly, thereby circumventing the internal controls and procedures as described above so that these payments would not be submitted through the Companys normal accounts payable system. Ms. Sachdeva, by herself and/or by directing others in the accounting department, processed wire transfers from the Companys bank accounts to pay for personal expenditures directly, thereby circumventing the internal controls and procedures as described above so that these payments would not be submitted through the Companys normal accounts payable system. This has been remediated by: (1) disallowing the use of any cashiers checks;
· Petty cash, manual checks and travelers checks. The remaining misappropriations of approximately $600,000 or 1.9% from the total amount of $31,500,000 from fiscal year 2005 through December 2009 were carried out by circumventing the Companys internal controls and other standard operating procedures involving the Companys petty cash system, manual check system and policy for using travelers checks. In doing so, the Companys policy requiring that all expense reports be submitted and approved by the CEO was circumvented. Out of the estimated $600,000 of these types of transactions, approximately $91,000 occurred during 2009. Approximately $107,000 of misappropriations involving the use of the Companys petty cash system, manual check system and travelers checks policy occurred during 2010. Remediation of these issues has been accomplished by: (1) eliminating the petty cash fund so all reimbursements run through normal controlled accounts payable channels; (2) eliminating the use of manual checks so all check disbursements are generated from the Companys accounts payable system check run; and (3) eliminating the use of travelers checks.
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Koss Corp. has a market cap of $40.2 million; its shares were traded at around $5.44 with a P/E ratio of 24.7 and P/S ratio of 1. The dividend yield of Koss Corp. stocks is 4.4%.KOSS is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
The aggregate market value of the common voting stock held by nonaffiliates of the registrant as of December 31, 2009 was approximately $13,772,465 (based on the $5.51 per share closing price of the Companys common stock as reported on the NASDAQ Stock Market on December 31, 2009.· Wire transfers and cashiers checks. Approximately $30,900,000 or 98.1% of the total $31,500,000 of unauthorized transactions from fiscal year 2005 through December 2009 was misappropriated by circumventing the Companys internal controls and other operating procedures for the payment of Company expenditures by using wire transfers or cashiers checks from the Companys bank accounts to pay for personal expenditures. Of the $30,900,000, approximately $8,500,000 was misappropriated by use of these means during 2009. Misappropriations by use of wire transfers or cashiers checks totaled $10,300,000 during 2010. These unauthorized transactions were processed by circumventing the Companys policy that all invoices over $5,000 were required to be submitted and approved by Michael Koss as the CEO, and all accounts payable checks generated from the Companys accounts payable system were signed by the CEO. Moreover, wire transfers were to be used only for authorized transactions including certain inventory purchases and transfers of funds between the Companys bank accounts. Wire transfers for inventory purchases and the recurring expense items required the approval by several employees including authorized Vice Presidents, while the wire transfers between the Companys bank accounts were processed and approved by Ms. Sachdeva and one of the other terminated employees in the accounting department. Ms. Sachdeva, by herself and/or by directing other employees in the accounting department, ordered cashiers checks from the Companys bank accounts to pay for personal expenditures directly, thereby circumventing the internal controls and procedures as described above so that these payments would not be submitted through the Companys normal accounts payable system. Ms. Sachdeva, by herself and/or by directing others in the accounting department, processed wire transfers from the Companys bank accounts to pay for personal expenditures directly, thereby circumventing the internal controls and procedures as described above so that these payments would not be submitted through the Companys normal accounts payable system. This has been remediated by: (1) disallowing the use of any cashiers checks;
· Petty cash, manual checks and travelers checks. The remaining misappropriations of approximately $600,000 or 1.9% from the total amount of $31,500,000 from fiscal year 2005 through December 2009 were carried out by circumventing the Companys internal controls and other standard operating procedures involving the Companys petty cash system, manual check system and policy for using travelers checks. In doing so, the Companys policy requiring that all expense reports be submitted and approved by the CEO was circumvented. Out of the estimated $600,000 of these types of transactions, approximately $91,000 occurred during 2009. Approximately $107,000 of misappropriations involving the use of the Companys petty cash system, manual check system and travelers checks policy occurred during 2010. Remediation of these issues has been accomplished by: (1) eliminating the petty cash fund so all reimbursements run through normal controlled accounts payable channels; (2) eliminating the use of manual checks so all check disbursements are generated from the Companys accounts payable system check run; and (3) eliminating the use of travelers checks.
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