The Case Study Analyzes Crazy Eddie

2010 Words9 Pages
The case study analyzes Crazy Eddie. Crazy Eddie was convicted of white collar crime through fraud triangle. Crazy Eddie involved in fraud through incentives, opportunity and rationalization. Crazy Eddie reported lacking rationalization but confirmed that incentives and opportunity were working. The company also reported lacking morality and excuses. Crazy Eddie executed its business without taking into account moral implications of doing business. Crazy Eddie illegally adjusted returns to avoid paying excessive tax thus faulting the federal government millions of dollars (Foderaro, 1998). Crazy Eddie paid workers off books to avoid compiling tax returns. Crazy Eddie administrators worked closely with external and internal auditors on reaching consensus about their illegal financial dishonest. Crazy Eddie overstated income to the public to attract people dumb stock at inflated prices using a variety of tricks. There were cases of money laundering aimed at increasing revenue reports to attract investors. Crazy Eddie inflated inventory assets to increase earned revenue. There were also cases of cut-off fraud that were done through decreasing accounts payable liabilities to increase reported returns. Debit memo was also practiced. The company’s financial records indicated fictitious purchase discounts and trade allowances to send customer friendly image against competitors.
Fraud practices of Crazy Eddie worked for some time making it enjoy funding and attracted many people

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