Barry Minkow is the founder of the company who established it. The accounting fraud started when ZZZZ Best had shortages in its cash flow because the company it was paying the investors for the restoration projects which are not existed. Earlier, the company fell because of the credit card fraud. Minkow did not pay to woman, so she told the people who was defrauded by Minkow which charged him $72,000 of credit cards fraud. Its stock price fall and Ernst & Whinney found that Minkow is writing checks for nonexistent contracts.
In this essay, I will discuss the circumstances that resulted in the merger, assess the significant positive (or negative) effects of the merger, and examine the organizational structure that has resulted from the merger. American Airlines filed for bankruptcy in November 2011. According to an interview with Richard Quest of CNN, Thomas Horton the new CEO of American Airlines stated that the company was forced into bankruptcy because of the cost disadvantages it faced compared to it’s competitors that had already gone through a bankruptcy. The news came as a shock to many. The company had enough money to sustain the losses that it may incur through
Jake DeSantis wrote a letter to chief executive of AIG explaining what the company did was wrong, but explain why they did all those things. Jake DeSantis step down form his position of executive vice president. Critical Factors of Success: AIG have some factors for their success. The management took a lot risk that was concern out of the norm. AIG was made a profit when they did the credit default swaps.
In 2008, the parent company that owns University of Phoenix online, Apollo Group, was found guilty of securities fraud and ordered to pay $270 million to a group of investors. The unethical dilemma stemmed from a report that was very crucial of the enrolling practices of the school that the company refused to disclose. The company believed that the report was
Wages in the industrial sector were not keeping up with huge increase in manufacture and profits. Stocks lost a huge amount of money in a single day. Investors who had borrowed money to buy stocks were particularly hard hit, as were the banks that had lent the money (Canadian History 1201). Therefore the stock market crash was a very big event that caused The Great Depression. There were many factors that caused the Great Depression.
His strategy was to expend through aggressive acquisitions. In this case, we will answer some questions such as which functions of worldcom were the problem and discuss those problems, why following orders is not an excuse for breaking the law, what is Cynthia cooper doing after the fall of worldcom and what would have been another way to resolve the problem. Worldcom set world records for the largest company to ever go bankrupt, and for the largest accounting fraud. The top departments of the whole issue were the management and the accounting departments. The objective of managers is to maximize share holders values, the management department failed to fullfil investors goals .
The stress that can compel a company to doctor their financial data can override the compromise of ethics within an organization. A look back at the catastrophic financial mistakes of health care organizations in the past illustrates the devastation unethical accounting can cause. HealthSouth provides an excellent glimpse into the horrible consequences when it all comes crashing down. According to Bouchard (2012), "Committing fraud, said the former CFO, had consequences he couldn’t and didn’t foresee. It nearly destroyed him emotionally, which is why he retired to everyone’s surprise in 1997 at the age of 54, just a year after the fraud began.
Fred Bagg on the other hand can argue that he was hired despite the CEO knowing that he thus not have the requisite skills to produce proper financial statements, and to ensure that the financial reports is free from all misstatements. Thus could be used to rationalize the fraud that exists within the reports. Conditions for Misappropriation of Asset Asset Misappropriation Fraud is one where an employee steal or misuse an organization resources. Asset of the organization are taken to directly benefit the individual who committed the fraud. Misappropriation of asset may occur under different circumstances: 1.
There can be a lot of factors as to why companies file for bankruptcy and closure. In the case of Enron, the first set of problems in the company manifested when traders reluctantly gambled with company assets in the oil market. They lost $90 million in a period of five days. Since then company reserves disappeared and auditors saved the company by reporting fake net worth and imprecise trading revenues resulting to accounting scandals in the company. Due to the company’s compound business model and unethical practices, they required that the balance sheet is to be modified accordingly to illustrate satisfactory
Sherron Watkins Enron was an American energy company with very positive growth prospects. The Enron accounting scandal hit the papers in 2001. Enron purposefully confused financial statements andfiddled with figures to give analysts and investors a false sense of how well the company was performing. The auditor firm for Enron was Arthur Andersen. The firm was pressured by Enron to look for loopholes in GAPP laws for saving money and capitalize on exploitive practices.