THE PARMALAT SCANDAL
The Parmalat situation started out as a fairly standard – although sizeable –accounting fraud. Not even the best auditors could prepare for what was to come from this company. The Parmalat group, a world leader in the dairy food business, collapsed and entered bankruptcy protection in December 2003 after acknowledging massive holes in its financial statements. This happened when billions of euros seem to have gone missing from the company’s accounts. This dramatic collapse has led to the questioning of the soundness of accounting and financial reporting standards as well as of the Italian corporate governance system. Parmalat, which is headquartered in the central Italian city of Parma, was, like most Italian
…show more content…
Most of the money that moved in, around and out of the company has since been traced, although the final destination of some of it is still unknown. Tanzi has admitted transferring some €500 million to family firms, but investigators say that up to €1.3 billion may have gone this route. Tanzi was sentenced to 10 years in prison for fraud relating to the collapse of the dairy group. The other seven defendants, including executives and bankers, were acquitted. Another eight defendants settled out of court in September 2008. In September 2009, three lawsuits by Parmalat Capital Finance Ltd. and Enrico Bondi, CEO of Parmalat, against Bank of America and auditors Grant Thornton, were dismissed.
In an attempt to downplay the extent to which corruption and fraud have penetrated to the heart of global capitalism, commentators have seized on the fact that many of Parmalat’s former top executives are related to claim that the scandal is simply a case of a “family firm” failing to adhere to good corporate governance practices. Not surprisingly, Parmalat’s top executives are going along with this story, insisting they were only acting “under orders” from the padrone. The scandal, however, has engulfed other major firms. There are the accounting firms—Grant Thornton and Deloitte and Touche, and the banks—Citicorp and Bank of America. Citicorp is directly linked to the $1.5
Thomas Foods is a third party entity that will best benefit working off of a Purchase Order over trying to change their accounting procedures entirely. With a
Sony have been known worldwide as a Japanese multinational company, its efforts trying to expanding business in United States, have made that Sony acquires CBS Records and Columbia Pictures. Thus, creating Sony Music and Sony Pictures, which represent Sony entertainment. This involved to the company in $1.2 billion of debt, and assigned goodwill assets for $3.8 billion.
Page 3 Page 7 Page 12 Page 17 Page 20 Positive Accounting Theory Ethics in Accounting Accounting for Physical Assets & Intangible Assets Accounting for Assets in Mining & Agricultural Industries ounting Accounting for Provisions
Classification: Posting of sales transaction to proper account: tested when accuracy tested; focus on unusual items
Richards adopts a teleological-parochialism position 1 to justify that his actions are ethical, 2 even though they are illegal (Baugher & Weisbord, 2009). 3 Richards argues that his actions are ethical as they resulted in desirable consequences, in the form of better sales/performance figures, which met analyst forecasts and positively affected shareholder value (Radtke, 2004; Fernando, Dharmage, & Almeida, 2008). 4 He acted in the interests of his ‘in-group’ (other executives/managers), maximising their performance-based compensation, 5 at the expense of others (Barnett, Bass, & Brown, 1994). 6 Richards also claims that his actions were not serious, as recognising revenues
Now one must ascertain that such regulations would only be applied under certain governance systems- a good government; a government that is liable to the people. In such cases, there should be funds available for social programs. I will classify social programs as two types, based on how they should prioritizes allocation of funds:
The global market has shown exemplary contribution to the growth of the world's development until recently where financial crisis have been bombarding most economies. As a result, the cost of livelihood had been unaffordable to many who live below the dollar. The monetary crisis has led to the lowering of many currencies against the dollar, hence advancing the economy crisis to most worldwide nations. This turn of events has been attributed to the lack of exercise of business and management ethics in many multinational companies, firms and investments. Financial scandals have been the order of the past twenty years leading to the sweep over of the flourishing global market. The scandals, especially in larger companies and multinational, are spurred by inter and intra-conflicts in their organizational structures.
Leadership: She is responsible for being a supporting trainer to the Lead Technician on the evening shift.
Discuss filing requirement? - Filing requirements are specified by law for each type of taxpayer. In addition, all corporation must file a tax return annually regardless of their taxable income. Therefore, estates and trusts are required to file annual income tax returns if their gross income exceeds $600. In the filing requirements for individual taxpayers are a little more complex as they depend on the taxpayer’s filing status, age and gross income. The gross income thresholds are calculated as the sum of the standard deduction, additional deduction for taxpayers age 65 or older and personal exemptions that should be applied to each respective filing status. In addition, the amounts are indexed each year for inflation. Thus, when a taxpayer is due a refund which happened to occur only when
Terrance and I had a brief meeting before he met his ACCT 220 tutor. He needed to work in two assignments for that class which are due on Sunday (10/29). Terrance and I tried to make an appointment with Terrance’s academic advisor, but it was not possible for him to make this appointment. We will try to make this appointment during our next meeting.
The word “fraud” was magnified in the business world around the end of 2001 and the beginning of 2002. No one had seen anything like it. Enron, one of the country’s largest energy companies, went bankrupt and took down with it Arthur Andersen, one of the five largest audit and accounting firms in the world. Enron was followed by other accounting scandals such as WorldCom, Tyco, Freddie Mac, and HealthSouth, yet Enron will always be remembered as one of the worst corporate accounting scandals of all time. Enron’s collapse was brought upon by the greed of its corporate hierarchy and how it preyed upon its faithful stockholders and employees who invested so much of their time and money into the company. Enron seemed to portray that the goal of corporate America was to drive up stock prices and get to the peak of the financial mountain by any means necessary. The “Conspiracy of Fools” is a tale of power, crony capitalism, and company greed that lead Enron down the dark road of corporate America.
Unit CM= $160 average full passenger fare – $70 average variable cost per passenger =$ 90
Cendant Corporation, one of the world’s largest hotel and real estate franchises was known as the largest accounting fraud before Enron. Cendant Corporation was created in 1997 when Hospitality Franchise Systems (HFS), Inc. merged with Comp-U-Card international (CUC). Chairman Walter Forbes and Vice-chairman Kirk Shelton were the perpetrators to a decade long accounting and securities fraud. The day after Cendant exposed evidence of accounting irregularities the corporations stock and convertible bonds lost nearly $14 Billion (Morgenson, 2004). This paper will address the issues that went wrong with Cendant and how the crimes fit into to Friedrichs’ typologies.
When Parmalat filed for bankruptcy in 2004, it was clear that it would become one of the biggest corporate scandals in Europe (Buchanan & Yang, 2005). According to Melis (2005), gatekeepers failed to assure a true and fair view of Parmalat’s financial situation and performance. Neither rating agencies nor financial analysts could examine the developments at Parmalat in order to protect minority shareholders and prevent the
The rise and fall of the Royal Bank of Scotland is characterized by poor corporate governance which allowed for the complete dominance of the executive management over the board of directors and a massive principal-agent problem. Positive social dynamics and the power of weak ties allowed for compliance while intimidation and bullying tactics silenced questions, concerns and opposition. The board’s utter compliancy and borderline negligence enabled rampant, unchecked empire-building at the cost of shareholder value and led to a spiral of unaccountability and gross incompetence. Stakeholders’ loss of confidence from misinformation and misdirection was an inevitability that sealed