A Case of Deceiving Auditors and Dishonesty

550 WordsFeb 4, 20182 Pages
The three main directors involved in this case were Daniel Wilkie who was the chief operating officer, Timothy Mainprize who was the chief financial officer and Stephen Burroughs who was the company’s manager (Lampe, 2005). The three directors were charged with charges of deceiving auditors and dishonesty. Wilkie was charged with two offences of dishonesty as a company’s officer and misleading an auditor of the company, Mainprize was also charged with the same three offences and Burroughs was charged with a misleading a company’s auditor offence. The three directors made the auditors and the investors of the company believe that it was adequately reserved. In other words, they made these auditors and investors believe the company had attained an $8.6 million profit whereas it had actually incurred a $ 19.1 million loss. Between 1 March and 6 May in the year 1998, Wilkie and Mainprize, on behalf of the company, arranged with General Cologne Reinsurance Australia, that they (FAI) would pay a premium of $67.5 million if they (General Cologne) would give back a reinsurance benefit of $65 million. Between 23 June and 26 June 1998, the same two executives made another deal with the same reinsurance company (General Cologne). This time FAI paid a premium of $89.7 million so that they could retain a benefit of $87 million. In another occasion between the 26 June and September 9 1998, the two men made another deal with the same company, General Cologne. This time, FAI paid $ 12.5
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