Wr Grace Case Summary

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

The Enron and WorldCom scandals were arguably the incidents that permanently changed the procedures for accounting controls. In response to these incidents, the Sarbanes-Oxley Act (SOX) of 2002 was passed. Once the knowledge of these scandals was made public, a number of subsequent accounting scandals were discovered in public companies such as Tyco International, HealthSouth, and American Insurance Group. In addition, a then-employee-owned company, Post, Buckley, Schuh & Jernigan, Inc. (dba PBS&J, now known as “Atkins North America, Inc.”), was also hit by a similar accounting scandal. Henceforth, a case study of PBS&J is presented where we will examine the fraudulent transactions that

With different industry definitions and viewpoints, fraud can be a tough issue for audit committee members to grasp for oversight purposes. The legal obligations of audit committee members have intensified because their standard duty of care and loyalty to the entity has increased in light of management fraud activities.

In this case, Campbell pledged that in the future Campbell would provide “proper accounting for nonperformance related discounts, but they didn’t. The auditors might be reckless because they did not perform professional due care.

To conduct the audit, the firm must acquire sufficient understanding of the internal control processes to help determine the nature and timing of the audit. However, the audit is not designed to identify deficiencies in internal control or provide assurance. The firm will make the audit committee aware of any significant deficiencies that come to Anderson, Olds, and Watershed’s attention during the audit.

5. There were multiple red flags that were obvious in this case. The SEC ruled that BDO Seidman's independence was jeopardized because the auditors were irresponsible in auditing and paying attention to the red flags that were shown in the company’s financial statements. In the

Bob Schein, is a vice president of human resources at Glefair Electronics, as a listed company, Glenfair was required by the securities and exchange commission to issue public sales and profit forecasts Glenfair Electronics had over 10,000 employees and a reputation for producing high-quality electronic components used in a number of manufacturing applications.the company had begun to experience a slowdown in product demand. And their share price had declined as well in the last year and a half. Anwar patel joined Glenfair after completing his digree in accounting five years ago,for the past three years,partel had been preparing Glenfairs

Excello Telecommunications is looking to record revenue before the earning process has been completed or before the unconditional exchange has occurred. Terry Reed, the CFO is trying to influence the accounting department to look for options to record the sale of 1.2 million in equipment by December 31 to boost earnings on financial statements. The purchasing company does not want the order of equipment delivered until the middle of January.

Potential for misstatement & fraud: Compliance with the established procedures and controls were found to be ineffective. The fraud reporting process, technically put in place does not serve its intended purpose. The ineffective control environment has created an attitude and tone across the company where errors and inappropriate behavior may be seen as acceptable, thus creating opportunity for concealing fraud and potential misstatements.

If Vinson had continued to refer to each level of leadership even to the CEO, audit committee, board of trustees, the board of directors, or even the owners, and still no action is taken from them, then the IMA would have recommended that she should have gone to the next step in the resolution of ethical conduct which is to refer to an IMA Ethics Counselor. This individual or another similar independent advisor is useful in clarifying ethical issues in a confidential and unbiased manner while providing other options for individuals to take.

The audit committee’s responsibility was to look over the accounting and financial reporting process as well as the financial statement audits; appoint, compensate and oversee the external auditor; and to ensure that the company has a whistleblower program. (p. 52) At first glance the committee could notice that something was not right with the company’s financial records. But nothing was done and nothing was said.

| * David would breach S150 if he fails to prepare a “true and fair” audit report. * If David concedes to believe the CFO but not his own professional judgement, he fails to follow the regulations (S110, S120 and S140). It can adversely affect the good reputation of the profession.

In 2013/14 year-end review, PwC had brought up issues about “Commercial Income Accounting". They enquired how they documented commercial investments from suppliers .This enquiry was the third time that they had raised this issue with Tesco, however the organization's review board had inferred that this area was not of any concern. Senior staffs at Tesco were pressured heavily to meet targets and this may have propelled them to change figures to meet targets. (Gagan Kukreja and Sanjay Gupta2,

The executives of Waste Management, in order to save their jobs and keep/increase their personal bonuses, manipulated financial records in order to give the appearance to investors that certain earnings targets were

This paper critically analyses the independence of the internal audit function through its relationship with management and the audit committee. Given the growing role of internal auditing in contemporary corporate governance and independence has gained renewed attention.