accounting ethics lines are crossed‚ CPAs may and should accept the fact that they can lose their jobs and their livelihoods. They may also find themselves enjoying some quality time in jail depending on the crime like the auditor in the Bernard Madoff case. When Bernard Madoff filed false reports and made misleading statements‚ his accountant David Friehling backed him 100%. This went on for roughly 17 years and $65 billion in stolen funds. It is during that time the Madoff ’s Ponzi scheme went unnoticed
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in the U.S. Today‚ it is perhaps best known for a massive accounting scandal that led to the company filing for bankruptcy protection in 2002. In 1998‚ the telecommunications industry began to slow down and WorldCom’s stock was declining. CEO Bernard Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses endeavors. The company’s profitability took another hit when it was forced to abandon its proposed merger with
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stock exchange; a member of the Board of Directors on the Security Industry Association; and a former National Treasurer of the American Jewish Congress. (Hirt‚ Block‚ Danielsen 2011) His greatest achievement was starting and being the chairman of Bernard L. Madoff Investment Securities LLC in 1960. His investment group gave him wealth and notoriety among the financial elite of New York City and around the entire country. Many trusted him and accepted his financial advice for their investments. By
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Exercise 1: Bernard Madoff‘s Ponzi Scheme (i) Background of man involved (concern) in the case: Bernard Madoff was a former Chairman of the NASDAQ Stock Exchange‚ a Wall Street legend before his arrest. (ii) Ethical issues: In 2008‚ during the economic meltdown in the United States‚ Madoff could no longer honor his investor’s cash requests. When he admitted to this Ponzi scheme‚ it was a massive investment fraud that had affected many people including high profile investors. He pled guilty
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it there to earn even more. The wealthy investor doesn’t need a monthly check so he may take the advice to ’let it ride’. But if he hears rumors about Bernard Madoff Investment Securities‚ he (meaning rich investor) may decide to take all of his money out. If Bernard Madoff Investment Securities (BMIS) cannot talk rich old investor out of it‚ Bernard Madoff Investment Securities will use new investor funds to pay off the old investor. That is the concept of a pyramid. The old investor gets his high
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Research Paper Bernie Madoff’s Ponzy Scheme Contemporary Business Ethics Contemporary Business Ethics Contemporary Business Ethics June 16‚ 2012 Table of Contents Ethical issues involved……………………………………………………………..3 Relevant facts……………………………………………………………………….4 Fairness to all concerned……………………………………………………………5 Impact on society……………………………………………………………………5 Impact to related industries………………………………………………………….6 Impact to the stakeholders…………………………………………………………
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Bernie Madoff‚ an American stockbroker‚ investment advisor chairman of Wall Street firm‚ has operated the largest financial fraud – Ponzi scheme in U.S. history in 2008. Before he was arrested by FBI agents in December 11‚ 2008‚ he was a chairman of Bernard L. Madoff Investment Securities LLC. He founded this Wall Street firm with his family members in 1960. His brother and sons were charge of different and important positions in the company. Before he was sentenced guilty of massive Ponzi scheme‚ he
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told the truth. This man‚ Bernard Ebbers‚ violated that trust by telling lie after lie about the true financial condition of WorldCom. Bare with me as I summarize some background facts on Bernie and WorldCom Later in this trial evidence may be presented to persuade you that Bernie was aloof of accounting or somehow not connected to the fraud that took place. The evidence will also highlight he was hands on‚ savvy‚ involved in every aspect. The story of Bernard Ebbers has another element
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In the late 1990’s‚ WorldCom was a successful company and leader in the telecommunications world. They had merged with MCI and the company was regarded for being innovative and growth hungry. However‚ in the midst of all the mergers WorldCom CEO Bernard Ebberly began to mismanage the company. WorldCom was no longer meeting their numbers and it looked like stock prices would fall. Rather than letting this happen‚ executives at WorldCom doctored the books. CFO Scott Sullivan and auditors used accounting
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Internet‚ update facts in this case with more current information. How do these new facts reflect changing social attitude towards the investment industry? 1. What are the ethical issues involved in the Madoff case? 2. Do you believe that Bernard Madoff worked alone‚ or do you think he had help in creating and sustaining his Ponzi scheme? No there is no way possible for Madoff to create and sustain his Ponzi scheme on his own. By all accounts‚ this scheme has been going on since sometime
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