Healthsouth CEO Richard Scrushy was charged with money laundering‚ fraud‚ false corporate reporting‚ racketeering‚ obstruction of justice and bribery among other charges. Scrushy was the first CEO who faced charges under the Sarbanes Oxly Act 2002 in the wake of the Enron scandal. After the scandal was uncovered PricewaterhouseCoopers forensic accountants were brought in to bring to light the extent of the fraud. Although emails were deleted by the Healthsouth system every 60 days
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1 2 3 4 5 6 7 1. Andersen: An Obstruction of Justice? C.83 C.83 C.83 C.83 C.83 B.63 C.83 2. PTL Club—The Harbinger of Things to Come 3. GM 11.74 12.65 11.74 12.65 11.74 12.65 11.74 11.74 11.74 4. Unhealthy Accounting at HealthSouth 4.64 4.64 5.70 5.70 C.82 G.84 5. KPMG: How Many Firms? B.64 B.64 B.64 1.56 6. Something Went Sour at Parmalat 6.58 7.72 4.65 12.64 7. GE: How Much Are Auditors Paid? B.65 B.65 B.66 B.66 5.71 5.71 8. Satyam
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Following are some of the most extreme examples of gross misconduct regarding fraud in our history. The Waste Management Scandal in 1998. They reported 1.7 billion in fake earnings by increasing the length of depreciation time for property‚ plant and equipment on the balance Page 2 sheets. The fraud was detected when a new CEO was brought in and the new management team went through the books. Motivation seems to be that this publicly traded company needed to keep stock prices up to keep investors
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Chapter 1 : Ethnics and Business Case : Aaron Beam and the HealthSouth Fraud Question 1 : Which of the “obstacles” to moral behavior do you see at work in Aaron Beam’s behavior and thinking? In Scrushy’s ? Moral brings the meaning of private conduct based on strict adherence to a sanctioned or accepted code or dogma of what is right or wrong‚ particularly as proclaimed in a sacred book‚ or by a non-secular group or sect. Moral behavior is the way of peoples’ acts or conducts oneself based
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CASE 2 Aaron Beam and the HealthSouth Fraud 1. Which of the “obstacles” to moral behavior do you see at work in Aaron Beam’s behavior and thinking? In Scrushy’s? An obstacle to Aaron Beam’s moral behavior is when he moved some of the business start up costs as expenses and lists them as capital investment‚ which inflates the company profit margins. Beam initially did this because of the pressure from Scrushy to make the company appear more profitable. Then‚ the cycle continues. 2. Explain how
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This assignment requires brief explanations. Save the fluff for another time. Auditing Insight p. 91-Things add up at HealthSoouth EY’s audit plan for HealthSouth included a materiality level of $5‚000 for all expenses. 1. Briefly explain why this was or was not appropriate‚ assuming there was no fraud? 2. What audit procedure(s) could have detected the fraud? 3. Why is fraud always material‚ no matter the amount? Auditing Insight p. 97-Interviewing. Some audit procedures require interviewing
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The 10 biggest frauds in recent U.S. History Enron: The energy company’s bankruptcy in 2001 after allegations of massive accounting fraud wiped out $78 billion in stock market value and led to the collapse of Arthur Andersen and the passage of the Sarbanes-Oxley Act of 2002. A class action settlement of $7.185 billion was the largest of all time. Former President Jeff Skilling is serving a 24 year sentence. Bernard Madoff: New York money manager Bernard Madoff’s $65 billion Ponzi scheme‚ the
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Expectation Gap and Corporate Fraud: Is Public Opinion Reconcilable with Auditors’ Duties? Jeffrey Cohena‚ Yuan Dingb‚ Cédric Lesagec‚* and Hervé Stolowyc b Carroll School of Management at Boston College‚ USA China-Europe International Business School (CEIBS)‚ Shanghai‚ China c HEC Paris‚ France a This draft – October 28‚ 2010 – Please do not cite or circulate without permission – Comments welcome Acknowledgments. Cédric Lesage and Hervé Stolowy acknowledge the financial support of the
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Nicole Hicks-Pinkard Is Greed Destroying Our Country? Greed comes from the love of money and power‚ which are the roots for all evil. One major cause of greed comes from the government and corporate firms that contribute to their temptation to do wanted is needed for them to obtain wealth and power within their industry. One should ask themselves‚ is greed destroying our country? The answer would be “yes.” Greed is the fifth of the seven deadly sins‚ which allows an one to become obsessive
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corporate fraud by increasing the stringency of procedures and requirements for financial reporting. 2. Who is Richard Scrushy and why is he relevant to SOX? Richard Scrushy first CEO charged with violating the SOX Act. He was owner and founder of HealthSouth Corp 3. Who‚ under SOX‚ is legally accountable for certifying and approving the integrity of the company and its financial reporting to the SEC and other financial organizations? Under the Sarbanes-Oxley Act‚ the CEO and CFO of publicly traded
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