preview

Similarities Between Healthsouth And Enron

Decent Essays
The accounting fraud made HealthSouth became a member of that disreputable group (Henselmann & Hormann 2010). In 2001, HealthSouth agreed to pay $7.9 million to settle Medicare-fraud allegation on overcharged assets. Trading in the securities of HealthSouth’s shares was suspended for two business days by SEC due to the materially misleading information in the marketplace (U.S. Securities and Exchange Commission 2003).
Fifteen former executives of HealthSouth, including all five of its recent Chief Financial Officers pleaded guilty to various charges of falsifying accounts. However, the CEO, Mr. Scrushy’s assets were freeze temporary by the court and also forfeiting his passport and keys to his private jet. Lastly, he was acquitted of all 36
…show more content…
The executives of the company failed to exercise proper judgement on behalf of their principals. The senior officers and professional accountant acted in their own self-interest rather than for the benefit of the shareholders. A director is legally expected to make judgements in the best interest of the company and its shareholders, and perhaps some benefits will flow to other stakeholders and the public interest (Brooks & Dunn 2014). Moreover, both HealthSouth and Enron were charged with accounting fraud, as HealthSouth cheated on accounts and falsified documents, and Enron kept huge debts off the balance sheets and led to…show more content…
The company was penalised with a $1.5 million refund to 7,000 affected customers as well as $50,000 contribution to Financial Counselling Australia. An involvement of an external compliance consultant was also compulsory to ensure consumer credit laws are complied with by reporting back to ASIC (Ong & Janda, 2016).
Issues involved in this case include governance issues, as Nimble were inconsistent with the recognition of activities from customers (Ong & Janda, 2016). They also lacked in governance in the sense that protocol was not properly complied with by not making appropriate inquiries to customers (Ong & Janda, 2016). They also failed to comply with consumer credit laws as evident of the need for an external compliance consultant (Ong & Janda, 2016).
Both companies failed to meet proper corporate obligations. As leaders of their company, the higher ups of Nimble and Enron should have been the positive model figures and encourage proper and scrupulous behaviour in order to carry out the proper procedures and protocols. This behaviour bred harmful activities and enabled carelessness within the
Get Access