Accounting Fraud Case Study: Healthsouth

HealthSouth is an inpatient rehabilitation company that owns and operates over 125 hospitals across the country and in Puerto Rico. I began working for HealthSouth in January of this year and will use my organization for this class. Our company serves patients who are overcoming debilitating illnesses such as stroke, head injury, multiple trauma, and orthopedic conditions to name a few. The focus is to work as a team in an interdisciplinary and collaborative manner in order for the patient to gain positive physical and medical outcomes. The gold standard of success is for the patient to be able to safely discharge home, and back to their daily lives. The company is publicly traded, and has seen its share of controversy in the early 2000s. Richard Scrushy, founder and former CEO, was ultimately acquitted of accounting fraud, but was found guilty in civil court. The scandal was colossal, and rocked the industry and brought down top executives. The rapid growth of the company and the fraudulent activity impacted thousands of stakeholders. Scrushy was not thinking about the open system concept and the significance of his decisions on stakeholders. The relationships between all the departments and entities at HealthSouth were affected by his fraudulent activities (Nassar, 2007).
The once plummeted stock prices have returned to an impressive amount, and the company has been able to show growth with addition of new hospitals and the acquisition of Encompass HealthCare. HealthSouth has restored its reputation by implementing core values and a corporate compliance plan. However, the leader sets the tone, expectations, and accountability of an organization. Changes continue to be on the horizon and the company will adapt once again as Jay Grinney retired last week effective December 31,