Pregent engaged in a scheme to defraud TechFab’s creditors, bankruptcy trustee and the bankruptcy court by transferring certain TechFab assets, including equipment and ongoing business, to a newly formed company. Pregent arranged for that new company to pay compensation for TechFab’s assets directly to himself, then filed a Chapter 7 bankruptcy for TechFab to discharge its debts all while concealing the pre-bankruptcy transfer of assets and the agreement to pay compensation for those assets to Pregent. Furthermore, Pregent failed to disclose the transfers and compensation agreement in TechFab’s bankruptcy pleadings and during his testimony before a meeting of
Maxwell Case Fraud Investigation Summary This report deals with the internal investigation of fraudulent activities committed by Anna Thomas of Maxwell and Company. The investigation determined that Anna had been making personal charges and cash withdrawals on Rusher Automotive’s credit card for two and a half years. Introduction The accounting profession believes there are three conditions necessary for fraudulent behavior, as well as a responsibility to to perform quality services with integrity, objectivity, and professionalism. Accounting firms have the responsibility to hire and monitor competent personnel, so they can fulfill their assigned responsibilities. This report will explain how all three conditions were present in Anna’s actions, how Max and Company failed to uphold quality, and describe Anna’s background.
• This case has had international repercussions with aggrieved persons suing culpable entities (Kennedy, 2010). In Ireland, a class suit has been brought against AA (Alternative Advantage) plc and Thema International Fund plc, investments funds that handled business for Madoff, by clients whose investments were affected by the case. • The SEC has undertaken various reforms to prevent rogue businessmen from defrauding the public (SEC, 2010, September, 10). These include measures aimed at securing investors’ assets by facilitating surprise audits of investment funds to establish the veracity of various portfolios. Audit Procedures The primary reliable source relevant to auditing investments is Statement on Auditing Standards No.
The targets of Special Agents who work for TIGTA are dishonest Treasury Department employees, as well as government officials and employees. In this book, the main target is Richard Onner, who is a computer expert working in the IRS National Computer Center. An anonymous tip had been received a couple years ago that
Company faced an immediate pressure from external environment because of lawsuits filed by its large customers like Cherry Communications, this damaged company’s reputation. Also, two to three of World-Com’s commercial customers filed for bankruptcy in any given quarter, this created a long term pressure on growth of WorldCom. Investigation from SEC mounted a big external pressure on WorldCom following which revealed multiple accounting frauds
Brief overview of WorldCom’s case and general discussion of its fraud nature: Beresford, Katzenbach and Jr (2003) stated that, from 1999 until 2002, a few executives at WorldCom perpetrated accounting fraud that led to the largest bankruptcy in history. The principle business strategy of its CEO – aggressive growth through acquisitions underlined its collapse and eventually imposed pressure to management to commit fraud. In fact, WorldCom’s fraud was a consequence of a set of complex factors, including the existence of dominant senior management, structurally weak internal controls, inadequate audits by Arthur Andersen, the poor oversight of the Board, and pressure from Wall Street’s expectation, etc. The large scale collapses of WorldCom and Enron triggered immediate remedies of corporate governance, essentially the Sarbanes-Oxley Act, which aimed to solve the issue of “lack of confidence” in the reported financials. WorldCom’s fraud was an intentional misconduct of the perpetrated senior management that results in an $11 billion material misstatement in the financial statements via two principle forms: reduction of the reported line costs and exaggeration of reported revenues, in order to create an image of increased earnings and revenue and hold the line costs lower than the industry average rather than indicate the truth and fairness of WorldCom’s wealth and progress (Beresford et al, 2003).
As I reviewed the exposure draft of proposed accounting standards updates regarding comparative financial statements, I came to the conclusion that there are more strengths than weaknesses in this new format. The first section, page 111, BC235, took me by surprise. This is requiring all businesses to “adopt the financial statement presentation on a full retrospective basis.” This provision would require all businesses to redo financial statements, from prior periods, into the new, proposed, format. This is a huge weakness. Changing the formatting and organization of financial reports is a big undertaking for most businesses, but to require businesses to redo many years of financial data into a new format would be a great cost and a source of great frustration for companies.
It currently continues to play a very valuable role in society and until recently accounting had set the standards for ethical and moral behaviour in business (Guy et al. 2003). Many high profile corporate failures over the recent years (e.g. Enron, HIH, AIG and Satyam) have been associated with large public international accounting firms. Calls for increased transparency and concerns about ethical behaviour ever since the Enron debacle have led to increased regulation over the financial reporting process, with the profession having lost a great deal of its credibility and public trust.
1) What were the individual factors that contributed to the failure of Enron? Briefly explain two key factors. In the repercussion of Enron’s bankruptcy filing, numerous Enron executives were charged with criminal acts. Those charges were fraud, insider trading and money laundering. Enron was described as “House Of Cards” as it was built over a pool of gasoline.
HRM 560 Week 3 Assignment 1 Prof. Rhonda Jones Chipping Away At Intel Throughout his tenure as Intel’s fourth CEO, Barrett faced numerous organizational changes that were necessary for the company’s survival, but ultimately affected how stakeholders viewed his effectiveness. During the first three years of Barrett’s term as CEO, major changes were made to reorganize the company’s business units and corporate culture. There are several factors, both internal and external, that served as the catalyst for change during Barrett’s tenure, from the 2001 collapse of the IT market to the fact that his new position in the organization meant that organizational changes were imminent for the thousands of individuals Intel employs. Even though, Barrett’s performance under these pressures was successful, there are some things he could have done differently to ensure that the Intel’s shareholders and employees alike understood and accepted his changes with ease. Discuss the different changes at Intel over the first three years of CEO Barrett’s tenure.