Barry Minkow started a carpet cleaning business in his garage at the age of 16. One year later‚ Barry decided that hid business does not bring him much profit and began his fraudulent activities. He was running false credit card charges on clients’ cards and check kiting. However‚ he was able to commit fraud on a large scale‚ when he gathered enough of a balance sheet built off fraudulent transactions. His major crimes were perpetrated against banks and investors by committing financial statement
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Barry Minkow – Misrepresentation and Ponzi in 1987 Establishment of ZZZZ Best Company When he was a sophomore in high school‚ Barry Minkow founded a carpet cleaning company - ZZZZ Best Company in his parents’ garage. At that time‚ the carpet cleaning industry has few entry barriers and all Minkow needed was a small amount of start-up capital. However‚ he soon found out that his firm was actually tough to survive in the industry as the ease of entry means fierce competition. The young man encountered
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In 1995‚ Barry Minkow was released from prison for good behavior. During his eight-year prison term‚ he earned advanced degrees from Liberty University in divinity. He also became a fraud investigator. The FBI used Barry as an informant because of his knowledge of fraudulent practices and journalist enlisted him to provide tips. Even though Barry claimed that God was the reason for his early release from prison and transformation‚ it was most likely because he was so helpful to the FBI (Lewis
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Company‚ Inc.‚ which is established by Barry Minkow‚ became a tool for its owner i. E. Barry Minkow to get money by lying to thrid parties via fictitious insurance restoration project. Difficulties in developing carpet cleaning industry made Barry Minkow think to get money in wrong way. Collaborate with Tom Padgett and also extensive social network‚ made this big scheme to deceive big investors became easy. After success in cheating investors‚ Barry Minkow think bigger to make more money. He
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ACC 461 Auditing Financial Statement Fraud: Lessons from the ZZZZ Best Case The video “Cooking the Books” discussed the ZZZZ Best case of fraud‚ it tells how and why fraud was perpetrated by Barry Minkow and why it was undetected for so long. According to the video‚ ZZZZ Best was founded by Barry Minkow in 1982; when he was sixteen years old‚ it started as a carpet cleaning company. But‚ due to high competition in the industry‚ low entry barriers‚ and bad internal control‚ this young entrepreneur
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corporate history was done by a man named Barry Minkow during the 1980s. At the age of 12 Barry got involved with the carpet cleaning business through his mother. One of the good things for a young person of Barry’s age is that this industry is fairly simple to get into. Therefore it required no prerequisite abilities or permits. However what Barry Minkow did not expect was the high tolerance required in order to run such a business. It was a thankless job and Barry had a hard time making a profit. His
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which is evident in the engagement letter. This allowed him to make serious mistakes when planning and executing the audit procedure. Furthermore‚ Larry Gray did not do sufficient research on Barry Minkow and ZZZZ Best prior to accepting the engagement. If he would have‚ he may have realized that Barry Minkow was fraudulent and that the strength of the internal controls was weak. This would have made Gray more inclined to physically inspect the “confirmations” of the restorations contracts and other
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By fabricating over 20‚000 documents Barry Minkow‚ Mark Morze‚ and a few other insiders were able to fool investors‚ auditors‚ banks‚ and whoever else that was interested in the success of a small carpet cleaning company that made it big. Like all frauds they eventually get blown wide open. In this case it was a young female journalist writing a filler piece on Barry Minkow’s success. When tying the story up she decided to make a call to the city just to verify their contractor’s license number‚
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cleaning operation. A sixteen-year-old young talented entrepreneur‚ Barry Minkow who is the founder of the company‚ initially runs it out of his parents’ garage. ZZZZ Best experienced tremendous growth in both revenues and profits during the first several years of its existence. During the period from 1984 to 1987‚ the company’s net worth poured from less than $200‚000 to more than $5 million on revenues of $50 million. Barry Minkow was introduced to the carpet cleaning industry at the age of twelve
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Inc. The start of ZZZZ Best: ZZZZ Best started as a carpet cleaning company. Barry Minkow founded ZZZZ Best in his parents’ garage in 1982 when he was only sixteen years old. Due to high competition in the industry‚ low enter barriers‚ and bad internal control‚ this young entrepreneur started to have cash flow problems‚ and a shortage of working capital. Pressure Leads to Fraud: Under financial pressure‚ Minkow started to commit fraud. He forged credit card applications‚ staged theft‚ used
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