Economics Homework Help

One of Jessica’s bookkeeping, a small doctor’s office, e-mailed him to introduce their new regional office manager, Agnes Rugio. As Jessica is reading the email, she believes she knows Agnes Rugio. Five years ago, Agnes was the head clerk for a dental office for almost eight years, using her position to embezzle approximately $85,000. She occasionally had one of the dentists sign blank checks, which she would then make payable to those she had debts with, including her credit card accounts, utility companies, and others that were similar to her employer’s. She would also sometimes forge a dentist’s signature. She then recorded the expenses under utilities and other miscellaneous expense categories.

At first, Agnes stole small amounts—$100 one month, then $500—but the amounts increased and she continued to grow bolder. The dentists fired her after discovering the embezzlement, but they never contacted authorities to have her arrested. Agnes was a single mother caring for three children and her elderly mother, and out of sympathy, the dentists agreed to accept restitution privately from Agnes.

Jessica became the dentists’ accountant about six months after their discovery of the theft. The dentists have made reference to the loss when discussing the financial status of the office. Without asking, she is fairly certain that the dentists would not be willing to allow her to disclose this information to a third party.

Jessica’s knowledge of Agnes’s previous embezzlement and its implications for her doctor-client concerns her. The doctor had worked with the former regional office manager, Celia, for over 20 years, trusted her implicitly, and had her handle most of the practice’s financial affairs, including preparing checks for signatures, making entries on day sheets, and taking deposits to the bank. If the doctor expects Agnes to fill that same role, he may be assuming risks greater than he realizes.

What should Jessica do?