1. How was it possible for Parmalat managers to “cook the books” and hide it for so long? Solution Parmalat was able to cook the books mainly due to the fact that Italy has a low level of accounting transparency. The story began in 1997, when Parmalat decided to become a "global player" and started a campaign of international acquisitions, especially in North and South America, financed through debt. Soon, Parmalat became the third largest cookie-maker in the United States. But such acquisitions
Overview Parmalat SpA is a multinational Italian dairy and food corporation that specializes in UHT (Ultra High Temperature) production of long life milk. It was founded by Calisto Tanzi in 1961 and the headquarter is based in Collecchio, Italy. In 2003 the company collapsed with a €14 billion hole in its accounts and it is still considered the Europe’s biggest bankruptcy. Scandal Key Players in the scandal Calisto Tanzi - 10 year sentence for market rigging, accounting fraud(2009) Fausto Tonna
Parmalat Finanziaria, S.p.A. Case Brief Summary: Case Questions: 1). Identify key factors or circumstances that complicate an independent audit of a multinational company One thing to always keep in mind is that the culture is different across the globe. Auditors of multinational companies may face cultural and communication barriers with their clients, which can complicate audit tasks. We also have to account for different currency across different countries and any transactions involving them
Case Study：Parmalat：Europe’s Enron 1. Review the facts in the case, especially the charges in the complaint, and evaluate the auditors’ compliance with GAAS. Do you think the auditor did all they could to detect the fraud? Evaluate whether auditors exercised due care and the level of professional skepticism to be expected in an audit the size of Parmalat. After review the material, it is apparently the auditors did not do all they could to detect the fraud Parmalat and its management conducted
Something went sour at Parmalat The Italian dairy food corporation Parmalat SpA was founded by Calisto Tanzi in 1961 and grew to a global company. It had about 140 production centers, 36,000 employees and 5,000 contracted dairy farms (https://en.wikipedia.org/wiki/Parmalat). The dairy food giant defaulted on debt in November 2002 and filed bankruptcy in December 2003. It sounds ridiculous because Parmalat’s subsidiary in Cayman Islands had a $4.9 billion cash balance in Bank of America account
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
Parmalat Scandal Report Overview Parmalat SpA is a multinational Italian dairy and food corporation that specializes in UHT (Ultra High Temperature) production of long-life milk. It was founded by Calisto Tanzi in 1961 and the headquarter is based in Collecchio, Italy. From the year of 2014, the company’s revenue amounted to around 5.6 billion euros. The group is present in 33 countries with 73 factories around the world employing more than 36,000 employees. In 2003 the company collapsed with a
Nov 3 2016 Overview Parmalat SpA is a multinational Italian dairy and food corporation that specializes in UHT (Ultra High Temperature) production of long-life milk, dairy products (yogurt, cream based sauces, desserts and cheese) and fruit beverages.(Parmalat in brief) It was founded by Calisto Tanzi in 1961 and the headquarters is based in Collecchio, Italy. By the early 2000s, the small Italian company had become a global food empire spanning 30 countries and employing over 35,000 people.(BBC)
Introduction and Overview of the Corporation Parmalat is an Italian-based company most well known for its production of various forms of dairy product, as well as pastries and fruit drinks. The company, started in 1961 by a 22 year old Calisto Tanzi, was initially a small family run business that sold primarily meat products. Parmalat became a success once it had developed the concept of a milk that could remain unspoiled in tetra-paks for extended periods of time. This milk was called UHT (Ultra-High
structure creates economic incentives for managers to focus on their own interests and neglect those of shareholders. Following decades of exponential organic growth Parmalat stepped up its acquisition programme in the 1990s crossing many time zones using an aggressive and heavily leveraged strategy. By the end of the decade Parmalat was a complex web of 170 companies which had hid losses overstated assets/sales, understated its debt, and diverted company cash to Tanzi family members. In their 2004