Richard Scrushy Case Summary

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The rapid growth in net income with relatively small growth in revenue. They also knew that this was a risky profile because of Richard Scrushy domination at the top and his requirement for showing great quarterly results.
Ernst & Young also received emails from whistle blowers that outlined suspicious accounting practices at HealthSouth.
Ernst and Young should have been concerned about the management overrides that were taking place to “fix” the numbers. The auditors should have been suspicious of large adjustments and should have further tested and required documentation for these adjustments.
Interviewing client’s employees would be a way of determining the “tone at the top” of HealthSouth. The fact that Scrushy, a non-accounting
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