They created fictitious revenues by a number of means. They prepared phony invoices showing sales which overstated their revenues to show the company was growing faster than they actually were. Their vendors collaborated in the fraud by lying to the auditors when the auditors attempted to confirm some of these receivables. The auditors were not diligent when they verified these invoices. They should have probed further into the vendors to verify that these sales occurred.
If the poor performance is released, his wealth would be negatively affected and of course he wouldn’t be able to afford his luxury life style. 2) Opportunities: * The value of account balance in HealthSouth’s books is significantly based on estimates, such as bad debt and other liabilities, which allows the management to manipulate easily. * The ineffective in internal control, monitoring and control environment among the firm, which allows Scrushy control everything, do what he wants, or fire who goes against him. Also, the collusion between the management, involving bribing the auditor, makes the opportunities for committing fraud are more obvious. 3) Rationalization: * The management, especially the CEO and controller, agree on using “flexible accounting” for bookkeeping in order to meet the expectation and hide the poor performance.
In order to increase his income, he beggins charging customers more for each car wash and pocketing the difference. His actions are not unethical because Right Touch will not suffer a financial loss False Whistle-blowers bring illegal and sometimes unethical company behavior to the attention of regulators and advocy groups True Effective communication is more about style than it is about substance False In global communication, the successful comunicator assesses the audience's comfort level with the English language False
If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain.
They can easily use fraud to authorize payment for a false invoice. The accountant also should not be able to print checks and complete the bank reconciliation. It allows the accountant to perpetrate fraud because they have access to blank checks to write fake checks and then cover it up with their record keeping responsibility. Along with segregation of duties, this also violates independent internal verification. A different employee, separate from personnel responsibility for the information, should make the verification and should report any discrepancies to management.
Under the direction of Monus, the company had many accounting issues that could be easily caught by any auditor. The issues stemmed from embezzlement by Monus for both personal and professional pursuits and fictitious inventory on the books that covered the company’s losses. By 1992, three of the company’s four financial executives had previously worked for Phar-Mor’s auditor, Coopers & Lybrand. Therefore, Monus and other executives used their knowledge of the audit process to cover up their fraud (Williams, 2011). First, the company created “bucket accounts” where cover-up activities were recorded and then moved and divided between inventory of existing stores.
These same individuals trusted and respected Bernard Madoff and yet he showed less than the mutual respect a professional investor should show toward his clients. Family members were not immune to his scheme. In fact, other family members were encouraged to invest and also bring in new investors into the fold of his deliberate hoax of profiting off of the rich and unassuming. Madoff showed that he lacked care and empathy for his clients, clearly a pure dereliction of duty, to provide the best information and protect investor’s financial investments. There were also unethical issues involving the entity that was supposed to secure and watch over those that are investing our money.
1. Miller fits the profile of the average fraud perpetrator in that he gained the trust of his employer, he wasn’t violent, he worked where he committed the fraud and he spent the money he stole to have a better lifestyle. He would not have been able to continue the lifestyle he had without the money he was stealing. He was also stealing from new employers to pay back the prior employers. He differed from the average fraud perpetrator in that he admitted what he had done and promised to pay back the money he had stolen.
As the nation’s, and probably the world’s, largest company, Walmart has revolutionized the way Americans shop. Walmart provides a one-stop shop where you can buy any item needed for the lowest price available. They have become an example to the industry on how to be a successful company. However, in order to obtain and maintain all of this success, Walmart had to change some of America’s business principals, which has not been beneficial for the country in the long run. Walmart’s low prices are a direct result of their outsourcing of jobs, which negatively affects the United States’ economy, even though may seem beneficial.