CBA Scandal and FOFA Reforms

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

Visit the Board of Accountancy’s website and examine three disciplinary actions of your choice. Describe the act of the CPA or firm that resulted in discipline. What regulations and/laws were violated? What disciplinary punishment was applied? Do you believe the discipline was

It is clear from the case study that Alistair knows the contract is unorthodox. The problem he faces is whether he should overlook the bribe or report it to the board. The board of directors expects Alistair to tell the truth and report the bribe because of: his position as Chief Legal Officer, the board has a very strong ethics policy and they are wary of unethical activities.

Fraudulent financial reporting is one form of corporate corruption and may involve the manipulation of the documents used to record accounting transactions, the misrepresentation of accounting events or transactions, or the intentional misapplication of Generally Accepted Accounting Principles (GAAP) (Crumbley, Heitger, and Smith, 2013). Examples of fraudulent schemes befitting of this category abound and usually involve financial statement items that have been misclassified, omitted, overstated, undervalued, or prematurely recognized. One case involving CEO Bill Smith of Moonstay

conflicts of interest can have long lasting detrimental affects on the company. To this end,

Corporate and Criminal Fraud Accountability Act of 2002 – consists of seven sections that describes the stiff criminal penalties associated with being guilty of manipulating, destroying or altering of financial records or otherwise interfering with investigations.

The series of clever manipulations to bury almost $4 billion in misallocated expenses and phony account entries discovered by Cynthia Copper’s team threw open Pandora’s box. Ms. Cooper, a senior line manger, who worked for the WorldCom, CFO,

The Crown case in relation to the Westpac fraud is that the Defendant dishonestly acquired a loan of $13 million for a Kleenmaid company called EDIS Services Logistics Pty Ltd in November 2007. In relation to the insolvent trading counts, the Crown contends that, during a period from mid-2008 until before the collapse, the Defendant dishonestly failed to prevent EDIS Services Logistics Pty Ltd from trading while it was insolvent. Finally, the Crown claims that the Defendant committed a further dishonest act, by causing $330,000 to which the creditors of the Kleenmaid Group were entitled to be transferred to an entity of which the Defendant was a shareholder.

The treatment of conflicts of interest and other ethical dilemmas that may arise in investment decisions.

On the 2nd of May 2000, LeAnn’s mother (Belinda Rimes) filed a suit on behalf of her daughter, accusing Wilbur and Lyle of monetary misappropriation. In addition, it was also claimed that the co-managers behaved in a manner that was detrimental to LeAnn’s profession (Morris, 2003). Some of the charges filed against the partners include damages and in particular; contract breach, deception and breaches of fiduciary responsibilities. LeAnn’s mother hired an accountant to establish the exact amounts of which the co-managers had accumulated with damages; apparently the minimum of $7 million that Rimes had claimed (Marcone, 2003). However, the damages were indefinite because it was unknown exactly how much revenue was taken from LeAnn (BBC News,

The American Institute of Certified Public Accountants (AICPA) has the duty of ensuring CPA’s follow rules and stringent penalties can result if not compliant. A code of ethics is involved and revisions have been made in recent years. The entire ethics provisions apply to members in public practice, business, and other members. Furthermore, the provisions have made the revised code is the creation of three sections for members in diverse areas of practice to assist accounting professionals in each group to determine whether they are in violation of any rules of conduct, (Mintz, 2014). There are tools made for CPA’s to make better ethical decisions to avoid conflicts. For instance, a provision in the prior section explains of violation of honesty and objectivity if a member is coerced into pressure. Since revisions

The first matter that I will consider is that there is a real likelihood of a trust irregularity in the accounts of Howard Craven, as he would have fraudulently received monies from the Financier on behalf of Daniel. consider that I have no discretion as far as the expected trust irregularity is concerned and here I will disclose to the relevant authority, being the Law Society. I will explain to my client that I have no option in the matter.

This case involved a fraud orchestrated by three senior executives of Fair Finance Company (Fair) which had its headquarters at Akron Ohio. This fraud occurred from at least 2005 through November 2009 the defendants involved were the three senior executives –Timothy S. Durham, Chief Executive Officer, James F. Cochran, Chairman, and Rick D. Snow, Chief Financial Officer. These executives defrauded their investors by raising approximately $230 million from at least 5,200 investors through the sale of investment certificates by making materially false and misleading misrepresentations and omissions concerning, among other and returns, and the use of investor proceeds to purchase discounted consumer receivables. (SEC litigation release 2012)

1.) What does the Institute of Supply Management code of ethics say about financial conflicts of interest?

The Australian Security and Investments Commission (ASIC), is an independent government body that acts as Australia’s corporate regulator. The organisation is responsible for regulating Australian companies, financial markets, financial services organisations, and professionals working in investment, superannuation, insurance, deposit taking, and credit . ASIC administers a number of laws, most notably the Australian Securities and Investments Commission Act and the Corporations Act , from which it derives the majority of its powers. According to the ASIC Act the organisation should strive to improve the performance of the financial system, promote the confident participation of investors and consumers within that system, and administers the laws that authorise its functions and powers effectively and with the least possible procedural requirements . However ASIC achieves only partial success in fulfilling its organisational goals, and thus only fulfils its role in society to a limited extent. For example, ASIC was slow and unproductive in handling allegations of fraud and incompetence amongst financial planning advisers working for the Commonwealth (CBA). Although ASIC was able to identify negligent parties, the processes of ASIC’s investigation were long-drawn-out and enforcement action did not adequately account for the scope of misconduct suggested by their investigation. Situations such as this indicate ASIC’s inability to work effectively as a corporate regulator.