always be present in the financial world. They are shocking when they come to light and at the same time‚ consumer starts doubting the system that were supposed to be watching out for these frauds. These financial scandal is another reminder of how incompetent government overseers have been at detecting financial fraud and how ill equipped the industry has been at policing itself. This paper will back up that claim by looking at the Peregrine Financial Scandal that happened just last month of this year
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THE PARMALAT SCANDAL The Parmalat situation started out as a fairly standard – although sizeable –accounting fraud. Not even the best auditors could prepare for what was to come from this company. The Parmalat group‚ a world leader in the dairy food business‚ collapsed and entered bankruptcy protection in December 2003 after acknowledging massive holes in its financial statements. This happened when billions of euros seem to have gone missing from the company’s accounts. This dramatic collapse
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NEWS; Pg. CE11 LENGTH: 733 words Lately‚ cooking the books seems to be a national pastime in some corners of North American corporate culture. Over the last several years‚ Canadians and Americans have witnessed a rash of accounting and financial fraud incidents‚ including the debacles at now-bankrupt WorldCom and Enron‚ the Martha Stewart stock scandal‚ and recently‚ the largest Ponzi scheme in history allegedly perpetrated by Bernard Madoff. One effect of the stronger public spotlight on this
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involve fraud and deceit. According to the Miniature Guide to Understanding the Foundations of Ethical Reasoning‚ "The proper role of ethical reasoning is to highlight acts of two kinds: Those which enhance the well-being of othersthat warrant our praiseand those that harm or diminish the well-being of othersand thus warrant our criticism." It goes on to say‚ "For any action to be unethical‚ it must inherently deny another person or creature some inalienable right." It refers to fraud and deceit
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(EPS) of $1.23”.4 About two-thirds of HealthSouth’s revenues come from the Medicare program. In 2003‚ a massive accounting fraud was discovered that almost let to the company’s bankruptcy. The major problems of the fraud are lack of credulity‚ lack of integrity on the management part‚ lack of independence on the auditor part‚ and negligent of the auditors played role in the fraud. The company went public in 1986 and in order for the company to meet Wall Street’s expectation‚ the company began to artificially
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How is Fraud and Embezzlement defined as? Fraud is defined “the abuse of a position‚ or false representation‚ or prejudicing someone’s rights for personal gain (Serious Fraud Office‚ 2013). In Moore v. United States‚ (1895)‚ the Supreme Court defined embezzlement in the following terms: Embezzlement is the fraudulent appropriation of property by a person to whom such property has been entrusted‚ or into whose hands it has lawfully come. It differs from larceny in the fact that the original taking
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CASE STUDY: MARCH 2012 SEMESTER I. Analyze the case and respond to the following questions: a) Discuss the earnings management techniques employed by the management of Satyam. Earning management or creative accounting is referred to the manipulation or misrepresentation of the company’s financial earnings in order to achieve stable and positive financial position. This was achieve through directly or indirectly use of the accounting methods. Even though the manipulation may follow all
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Question 1 At the time Cynthia Cooper discovered the accounting fraud‚ WorldCom did not have a whistle-blower hotline process in place. Instead‚ Cynthia took on significant risks when she stepped over Scott Sullivan’s head and notified the audit committee chairman of her findings. Discuss the key criteria for the operation of an effective corporate whistle-blower hotline. Be sure to highlight potential pitfalls that should be avoided and reference professional codes‚ legislation and academic
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words all describing the same thing‚ FRAUD. Fraud affects the company‚ the consumers and it puts the entire economy at risk. According to the Huffington Post the top scandals of all time produced losses due to fraud totaling over one hundred and sixty nine BILLION dollars. ("The biggest accounting‚" 2010) Upon first glance the Sarbanes Oxley Act of 2002 which was signed into law on July 30th 2002 seemed like a great policy geared towards preventing fraud. Investors as well as the general public
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CASE 1.8 Crazy Eddie‚ Inc. In 1969‚Eddie Antar‚ a 21-year-old high school dropout from Brooklyn‚ opened a consumer electronics store with 150square feet of floor space in New York City 1 Despite this modest beginning‚ Antar would eventually dominate the retail consumer electronics market in the New York City metropolitan area. By 1987‚Antar’s firm‚ Crazy Eddie‚ Inc.‚ had 43 retail outlets‚ sales exceeding $350 million‚ and outstanding stock with a collective market value of $600 million. Antar
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