Richard Scrushy Case Summary

Dr. Richard Kolecki M.D. 4051 Clubhouse Court Center Valley, Pa. 18034 (484) 767-2196, was advised of the identity of Investigator Sean P. Brennan and of the confidential nature and purpose of the interview, Kolecki, provided the following information:

. The Corps of Engineers would be allowed to build a protective dike but only in a manner mutually agreed to by the Department of Interior and the Corps. This was a controversial provision, reflecting what was then accepted practice with respect to hurricane protection, and there was serious disagreement in Carteret County as to whether a protective dike would be a wise move. Finally, an area of about 250 acres at Lookout Bight, belonging to Sanford busi-nessman Charles Reaves, was “mysteriously” excluded from the Seashore and another provision entitled any property owner owning property as of January 1, 1966, developed for non-commercial, residential purposes on July 1, 1963, to a 25-year right of use and occupancy.

) There was a lack of adequate cut-off procedures to ensure the timely recording of certain period-end accruals. This resulted in an audit adjustment of $3,578,000. The benchmark for overall materiality is $3,508,000, I would consider the audit adjustment of $3,578,000 a material misstatement. Control environment, principle 2 the board of directors and management exercise oversight of development and performance of internal controls. Due to the severity and material weakness of lack of adequate cutoff procedures to ensure timely recording of period end accruals. Management and the board of directors should evaluate performance of internal control activities including adherence to standards of conduct and expected levels of competence. In

In the R. v. Stinchcombe case, a lawyer was charged with breach of trust, theft and fraud. His former secretary was a Crown witness at the opening of the investigation. She provided relevant evidence towards the defence. Former to trial, she was interviewed by an RCMP officer and a tape‑recorded statement was taken. Far along during the progress of the trial, she again was interviewed by a police officer with a written statement taken. The defence counsel was notified of the occurrence but not of the statements. His request for a disclosure was declined. However, throughout the trial, the defence counsel acknowledge without a doubt that the witness would not be called by the Crown and required an order that the witness be called or that the Crown disclose the main statements to the defence. The trial continued and the accused was found guilty of breach of trust and fraud. Conditional stays were entered with respect to the theft counts. The

One of the main defenses E&Y took during the early stages of the HealthSouth suit was the fact that the SEC had no well-defined rules with regards to audit-related practices. Another defense was the mere fact that E&Y never faced a criminal indictment for the HealthSouth fraud. This was mainly due to the statute of limitations placed on securities fraud. It sets it at the earlier of (a) 2 years after the discovery of the facts constituting the violation or (2) 5 years after such violation. Thus, the DOJ was unable to file criminal charges against the firm because the partner on the audit (G. Marcus Neas) was “unaware” of the fraud in 1993.

From ethical and legal perspectives, what do you feel business has learned from the Scrushy situation?

Without a question the BOD should have placed a high degree of reliance on Andersen, which at the time was one of the most prestigious worldwide accounting firms. The auditors should have known the kind of accounting taking place in Enron. In my opinion, Andersen knew, at least to some extent, the company’s financial condition. However, Enron was already too deep under water that blowing the whistle so late would have created problems for Andersen as well. According to the case, on 02/05/01, Andersen held internal meeting during which it addressed the company’s accounting from and oversight of the LJM partnership. Andersen never discussed these concerns with the Audit and Compliance Committee. Although the BOD has its faults, it should have been able to rely on Andersen’s work.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

In 1788, the ratification of the United States Constitution sought to establish the fundamental aspects of the nation’s government, laws, and protections of its citizens’ unalienable rights. Robert G. McCloskey’s The American Supreme Court (2016) explains that, during this period, the prospects of the Supreme Court were essentially unknown. As time progressed, however, the Court began strengthening its legitimacy with its decisions in major landmark court cases which, in turn, established its crucial role in shaping the judicial interests and values of the nation. As such, McCloskey (2016) traces the country’s judicial history by highlighting the Court’s great transitional periods regarding state rights, nation rights, property rights, and slavery. By the start of the 20th century, however, discrepancies began to emerge with the rise of

The story of HealthSouth begins with two of the most well know founders. Richard Scrushy was a bold, charismatic man of middle-class beginnings. He would rise from a mason to one of the highest earning CEO’s in the country due mainly to his ability to drive, charm, and manipulate those around him. Driven by the desire to attain wealth and status Scrushy was hired in at LifeMark where he rose through the ranks as a result of his unbridled competitive nature and workaholic tendencies.

Stable cash flows with estimated total revenues increasing from 559.9 million in 1978 to 937.8 million in 1984 (Note also its strong intellectual property as shown by

1. There are numerous differences between performing a review and actual audit on the financial statements, but the major one is that the review does not contemplate obtaining an understanding of internal control structure. Also, a review does not assess control risk, tests of accounting records and responses to inquiries by obtaining corroborating evidence through inspection, observation or any other audit procedure. It can point out significant matters of the financial statements but does not provide assurance of their accuracy. The issue with ZZZZ Best case is that the auditors review was not sufficient enough to review any misstatements on the financial statements. Ernst & Whinney never questioned the internal control, reviewed

This part opens with a tale about a man named Lee Harding. In August of 1997, he turned into the casualty of nourishment harming from solidified ground sirloin sandwich patties, which contained E. coli 0157:H7. The meat originated from a genuinely new, best in class Hudson Foods plant in Columbus. Open authorities reported a review on the hamburger when it was followed to the plant, however it was past the point of no return. 25 million pounds of the ground hamburger had as of now been eaten. Schlosser characteristics the late increment in foodborne disease to the way American sustenance is delivered. Since American meat creation is so "incorporated," more individuals are influenced at whatever point defilement happens. The uniform framework

Ernst & Young (E&Y) became CBI's independent auditors in June 1990. In 1992 and 1993, Castello made a fraudulent scheme for the company’s reported financial

In our opinion, with proper use of analytical procedures Ernst & Whinney should have detected the overstatement of the leased assets. The following analytical procedures should have been used, at least at the planning and overall review stages of the audit.