Acc499 Written Assignment

Read the David Miller case from Chapter 5. After reading the case, describe a reason why someone who has been entrusted with the firm’s assets would commit a fraudulent act against the company. Based upon your understanding of the case and your professional and personal experience, recommend a series of actions that should have been taken in order to pre

Phar-Mor, Inc was a thriving discount grocery store in the late 1980’s. Phar-Mor was moving product quickly but profit margins were not significant enough to pay the bills. By the early 1990’s, Phar-Mor declared bankruptcy due to fraudulent financial reporting and misappropriation of assets, making it one of the largest frauds in U.S. history. Below, we will use auditing standard AU 316.85 Appendix A in conjunction with the video “How to Steal $500 million” to analyze how incentives/pressures, opportunities, and attitudes/rationalizations allowed for fraud to start and continue at Phar-Mor.

What steps should management, the Board of Directors, or the Audit Committee of the Board of Directors take in response to allegations of possible fraud or illegal acts?

The situation began to unfold when the Securities and Exchange Commission was probing into a restatement of the company's stock price. Kozlowski's business practices raised some eyebrows. In 1999, the Securities and Exchange Commission (SEC) initiated an inquiry into Tyco's practices that resulted in a restatement of the company's earnings. In January, 2002, questionable accounting practices came to light. Tyco had forgiven a $19 million, no-interest loan to Kozlowski in 1998 and had paid the CEO's income taxes on the loan. It was found that he company's stock price had been overrated, and that the CEO and CFO had sold 100 million dollars' worth of shares, and then stated to the public that he was holding them, which was a misrepresentation and misled the investors.

Also outstanding all year were 6,330 shares of cumulative preferred stock , each convertible into 2 shares of common . The preferred stock pays an annual dividend of $5 per share. DiCenta’s tax rate is 40%. Compute DiCenta’s 2012 diluted earnings per share. (Round answer to 2 decimal places, e.g. 5.23.)

Mary Jane an employee of ABC Manufacturing Inc embezzled more than $400,000 in more than 6 years by check tampering and expense disbursement. Mary Jane has committed an occupational fraud as she as an employee has misused her position for her own enrichment by intentional misappropriation. Mary Jane had gone into credit card fraud, financial statement fraud, and money laundering. Mary Jane altered and cashed checks for thousands of dollars higher than identical check number copies and information recorded in company cash reimbursements files. Mary Jane used a company credit card to pay personal expenses. Other personal expenses were paid with the company credit card including cable TV bills of more than $200 per month. She altered the credit card statements to exclude her personal expenses and made general ledger entries to asset accounts and prepaid items to further conceal the transactions and close the books.

In 1998, an angry shareholder who described themselves as “fleeced shareholder” had e-mailed auditors and financial regulators questioning how HealthSouth was cooking their books. It is the date and detail in the e-mail that proves the most frightening. The e-mail displays that the fraud should have been caught long before it was uncovered. Unlike most investors, it was evident that this person had a background in accounting and raised legitimate concerns. Ernst & Young admitted to receiving this email in November of 1998. However, Ernst & Young felt the questions raised by the anonymous writer did not affect the presentation of the financial statements. Moreover, a former bookkeeper of HealthSouth, Michael Vines, also e-mailed Ernst & Young about specific area of fraud. His background qualified for his email to be considered worthy evidence. Nevertheless, Ernst & Young claimed that the accounting practices being question were

In the case of Wells Fargo, executives put a great amount of pressure on its employees to hit sales quotas, which lead to employees opening false accounts in current customers name. In this situation employees faced a dilemma and chose to commit unethical

This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act fast to prevent the accusations charged upon them, so that they may venture deep into the United States market. In the process, they had to act in a way that will present the company’s financial statements; cash flows in a way that they did not show any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which involves the act of offering the accounts in the way they are not in reality.

Jon Fries who was the CEO of F&C Company. He orchestrated a large scale financial fraud that led to the downfall of the company. Fries used inappropriate methods to realize his company's operating results, to inflate revenues and overstate period-end inventories. He used his position to come up with a big fraud which was an unethical approach by a CEO of a Company. It was highly unethical (-100 scale) to systematically overstate sales revenues by backdating the valid sales transactions.

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

Prepare a two-to-three page case study report on the following case: COVER STORY: INTERNAL FRAUD on pages 104-106 in Chapter 4: Billing Schemes of the Fraud Examination text by Wells. Discuss the coincidences involved in this case study. Use the 2009 Global Fraud Survey (also located in Doc Sharing) for references concerning perpetrator, size of fraud, detection, and controls.

1) What should have been the key points of the audit/fraud investigation report? What supportable audit conclusions could be drawn?

If we go in depth with Satyam computers scam that occurred in 2009, we will know what the fraud is, they manipulated their accounting details for seven years in order to show their company is more powerful than what it was in actual by cheating their employees, stakeholders, vendors, clients and everyone. This scam left us questions about security, law and governance and how importance they are in our everyday life, this scam created a doubt on Indian companies in the world market.

The financial loss of the organisation has been influenced by such unethical activities among personnel, the loss is colossal. These could result in the returns of investment for immeasurable behavior, affect company determination and goal compliments. There are enormous behavior that can be classified as unethical events such as shoplifting, deceiving customers, misrepresenting performance and so on. Apparently, employee theft is the most common and severe activity (Appelbaum, laconi, & Matousek, 2007)which are estimated at as much as $40 billion loss annually (Thau, Derfler-Rozin, Pitesa, Mitchell, & Pillutla, 2015). Furthermore, the Association of Certified Fraud Examiners has speculated that the worldwide business sector was suffered almost $2.9