Case Study Of REEBOK FRAUD Case

First and foremost, the accounting system used should be updated. The case stated that the system was 30 years old and that prior accounting period transactions could not be locked down, which enabled internal control processes to be bypassed. Enhancing internal

An “audit failure” is a situation in which a professional auditor fails to detect a material error in the financial statements of the company they are auditing. The audit failure in the situation of Rita Crundwell the failure was exacerbated by the fact that the auditors continually signed off on the misstated statements for years. Crundwell is responsible for many of the deficiencies mentioned, such as the missing funds and the incorrect invoices. However, she is not the sole person responsible for this fraud. The lack of internal control is to blame, and this cannot be placed on a single person. The government should have separated duties and used

The organizational structure of Phar-Mor was ineffective and lacked many control activities including: segregation of duties, authorization, documentary and IT controls. As a result, Phar-Mor’s president had a stronghold on certain upper level management and executives which gave him the opportunity to control the fraud and hide it from other members of the organization and supposedly Phar-Mor’s auditors, Coopers and Lybrand LLP.

Our project team analyzed the Fraud and Illegal Acts Case (True blood Case Studies- Case 08-9), which involves a questionable sales transaction made between Jersey Johnnie’s Surfboard, an SEC registrant, and Mr. Sinaloa, an independent sales representative of the company. As a simplified overview of the case, an external audit firm was hired on to perform a year-end audit of Jersey Johnnie’s Surfboards, Inc. Towards the end of the audit, the engagement partner notified the auditors that there could be a possibility of fraud and illegal acts made by the company.

The one pattern within the data that appears to be inconsistent yet if the auditors had established an internal control systems would be Monus the founder moving so freely throughout every aspect of the company with no one checking his movements. From choosing what properties to purchase to purchasing supplies. In any company there should be segregation of duties. For example, the person making the deposits should not be the person writing the checks. Had there been stipulations made it would not have been so convenient to commit the

The amount listed is the enrollment agreement was 10,020.00 which gives a difference of :

Potential for misstatement & fraud: Compliance with the established procedures and controls were found to be ineffective. The fraud reporting process, technically put in place does not serve its intended purpose. The ineffective control environment has created an attitude and tone across the company where errors and inappropriate behavior may be seen as acceptable, thus creating opportunity for concealing fraud and potential misstatements.

There are various procedures that could be taken in to account that would, if properly implemented, would have detected the frauds that occurred within the companies. There are many control risks that should have been taking regarding inventory along with preliminary audit strategies for the inventory and substantive test to be done that would have raised many flags during the typical audits as well as in depth ones.

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.

The auditing firm has been in engagement with the company throughout the period when the fraud was being committed. One of the common and clear indicators of possible fraud was the company’s cash flow statement. The company experienced positive growth in its profits from the year 1996 through to the year 1998. However, a close analysis of the cash flow statement shows that the company had experienced negative figures of cash flow from both operating and investing activities and positive cash flow from financing activities which would not sufficiently offset the negative cash flows from operating and investing. It is therefore evident

Adidas is a sportswear manufacturing company started by Adolf Dassler. Adidas group has incorporated brands including Adidas, Reebok, TaylorMade-Adidas and Rockport. The wings of the company are widespread and have assimiliated other productions including handbags, shirts, spectacles, watches, balls, and sportswear. Adidas is being the largest company that sells footwear in the European market and have achieved a momentous market share at the global platform. Adidas has achieved phenomenal sale and have reached the pinnacle of success on the global scale with other international footwear companies (McDonald & Milne, 1999).

As the WMI accounting fraud case shows, change exposes organizations to considerable financial fraud risks. The top officials used acquisitions and merger as means to perpetuate this fraud. This financial fraud took place due to the organizational breakdown of internal and external audit controls. As a result, the top management was able to commit this massive fraud without facing any resistance. It never occurred to them that they were violating the law because what mattered to them was pocketing as much as they could.

Additional concerns have been made in regards to the red flags missed by auditors. First of all, auditors should have been alarmed by the size of the cash account held in the Cayman Islands. Auditors should have remained skeptical about the existence of this account. They should’ve addressed this red flag with

Apparel and shoe manufacturers continued to offload the more costly yet easily replicated part so their business models to concentrate on brand building, marketing, sales and attaining greater distribution channels globally. These are the pressures all apparel and shoe manufacturers face, and it is particularly challenging in the athletic show industry (Kynge, 2009). Adidas, Converse, Nike and Reebok have been outsourcing production of their shoes for in some cases nearly three decades. Nike was one of the leaders in this strategy, seeing to create a more efficient supply chain and also drop the labor and union costs of manufacturing in the U.S. (Boje, Khan, 2009). Adidas, Converse and Reebok have all followed Nike's lead, with Adidas benefitting from the fall-out generated when investigate reports showed Nike using child labor throughout Pakistan and Vietnam (Boje, Khan, 2009). All four of these companies share a common prioritization of manufacturing operations, yet none of them with the exception of Nike has a comprehensive Corporate Social Responsibility (CSR) program in place to ensure ethical compliance to global standards of outsourcing in their industry (Nike Investor Relations, 2012). The intent of this analysis is to compare and contrast the four companies mentioned and their outsourcing practices. Their reasons for choosing to outsource are very much the same; the industry is shrinking

Adidas suffered a great market share loss that persisted for years and the company was obliged to dismiss a large number of employees from the IT and logistics