companies (Thomas). One of the companies whose fraud was unmasked by the passage of SOX was HealthSouth Corporation. A company in the healthcare industry who had overstated about $2.7 billion dollars in earnings since 1996. The company’s CEO, Richard Scrushy, was the first to be tried under SOX for misrepresenting and signing off on misleading financial statements(Accounting Fraud at HealthSouth). HealthSouth Corporation was founded by Richard Scrushy in Birmingham, Alabama in 1984 (Stempel). Scrushy
INTRODUCTION HEALTHSOUTH Corporation (HEALTHSOUTH) began its rise in 1984 when Richard Scrushy, Aaron Beam, and other close associates formed the HEALTHSOUTH Empire with venture capital from New Enterprise Associates of Baltimore. In the beginning, Richard Scrushy was the chief executive officer (CFO), Aaron Beam was named the chief financial officer (CFO) and William Owen, an accountant from Ernst and Young, assumed the position of comptroller. HEALTHSOUTH went public in 1986 and began rapidly
the mercy of the key executive’s business decisions. Employee stock option provide advantages to companies such as ability to attract highly motivated and entrepreneurial executives and the capacity to hire and fulfill incentive without draining earnings or company’s equity or spending cash. Obviously, employee stock option benefit companies at it provides tax benefit and no accounting cost, while encourages executives to act in shareholder’s interest and risk taking or aggressive business decision
The Accounting Scandal of HealthSouth HealthSouth Corporation is based in Birmingham, Alabama, it is the largest provider of rehabilitative health care services. It operates in 26 states in the United States of America and in Puerto Rico. HealthSouth provides rehabilitation hospitals, long term heightened care hospitals, outpatient rehabilitation satellite clinics and home health agencies. HealthSouth was found by Richard Scrushy in the year 1984 and was called
Introduction The business environment has become more complex; therefore, the demands for professional audit have been increased in order to provide reasonable assurance to users of financial statements. An auditor is individual qualified to conduct audits either internally or externally. An internal auditor is an individual whose primary job function is to audit his or her own company, while an external auditor is an individual from outside the company, who usually is employed by an auditing firm
and Ethics A major aspect of health care organization operation is that of financial management. Financial management of health care organizations incorporates ethical standards and proper reporting practices. Financial practices and ethical finance concerns are important to the success of any organization, particularly within the health care industry. The four elements of financial management, generally accepted accounting practices (GAAP), and general financial ethics standards are part
The HealthSouth Fraud: An In-Depth Analysis of the Fraudulent Activities and the Internal and External Audit Failure HealthSouth Corporation is one of the U.S.?s largest healthcare companies and is the biggest owner and operator of inpatient rehabilitative hospitals. The present CEO, Richard Scrushy, founded this Fortune 500 company in 1984. It expanded tremendously in the 1990s and received most of its revenue through Medicare. By 1993, it became the largest rehabilitation services company.
Analysis of Fraudulent Activities and Examination of the Failure of the External Auditor, Internal Audit, and the Audit Committee HealthSouth Corporation is one of the U.S.?s largest healthcare companies and is the biggest owner and operator of inpatient rehabilitative hospitals. The present CEO, Richard Scrushy, founded this Fortune 500 company in 1984. It expanded tremendously in the 1990s and received most of its revenue through Medicare. By 1993, it became the largest rehabilitation services
Running head: HEALTHSOUTH: THE RISE AND FALL HealthSouth: The Rise And Fall Abstract Richard Scrushy (Scrushy) had a vision and was driven by his leadership and entrepreneurial abilities. Scrushy was the mastermind and major creator of HealthSouth Corporation (HealthSouth). Scrushy served as chairman and Chief Executive Officer (CEO) of the corporation for more than 20 years. A Biographical Sketch: Richard Scrushy and HealthSouth. Retrieved March 22, 2005, from the World Wide
one of the largest outpatient surgery, rehabilitation and diagnostic imaging companies in US, known as HealthSouth corporate. The company had over 1,800 facilities in all 50 states which also happen to be the first scandal by listed companies in US after the Sarbanes-Oxley Act. Two main sections will be discussed from this case. Firstly, to explain the financial fraud methods of the HealthSouth corporate. Secondly, the audit failure of Ernst and Young will be discussed. The company grew quickly