Leslie Faye Essay

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The Leslie Fay Companies Paul Polishan graduated with an accounting degree in 1969 and joined the Leslie Fay Companies shortly thereafter. Paul quickly became friends with the founder’s son, John Pomerantz. The Leslie Fay Companies, founded by Fred Pomerantz, was based out of New York and manufactured women’s apparel. Fred hired Polishan himself because he saw many similar traits in the young graduate (Knapp, 2013, p. 71). John Pomerantz, Fred’s son, was appointed President of the Leslie Fay Companies in 1972 and assumed responsibility for the company’s day to day operations. The company’s corporate headquarters was located in Manhattan while the accounting offices were separated and located some 100 miles away in Wilkes-Barre, Pennsylvania. During Polishan’s duration as acting CFO (Chief Financial Officer), the accounting department earned the nickname “Poliword” due to Polishan’s strict running of the department. Polishan’s controller, Donald Kenia, was often left in command when Polishan made his frequent trips to the corporate headquarters. Although considered quiet and docile, Kenia accepting full responsibility for the $80 million income overstatement from 1990 to 1992. Coworkers were shocked as the employee seemed so quiet and timid. Even after the admittance of carrying out the fraud, many third parties remained incredulous that Kenia was the mastermind behind the fraud. Polishan and Pomerantz both denied any knowledge of the fraud that took place. Leslie Fay’s audit committee quickly launched a full investigation which took approximately 8 months. The former auditing engagement team of BDO Seidman resigned as the SEC (Securities and Exchange Commission) maintained that the auditing firm would not being acting in an independent manner. Arthur Adersen later took over as the auditing firm for the Leslie Fay Companies. The audit committee released their

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