1. identify how computers enabled the situation/person
2. In foresight, were the proper controls in place
3. in hindsight, what should have happened or could have been done to stop the situation
4. If there were proper or sufficient controls, what went wrong?
Summary: “In December 2003, Italian prosecutors launched an investigation into suspected fraud at global food group Parmalat after it revealed a gaping hole in its accounts. The company, known around the world for its long-life milk, stunned financial markets on Dec. 19 when it said a document showing 3.95 billion euros ($5.07 billion) held by a Cayman Islands subsidiary was declared false by Bank of America. Company founder Calisto Tanzi subsequently said when questioned that the accounting hole was about 8 billion euros. He is among nine arrested so far in what U.S. regulators have called one of the world's biggest corporate fraud scandals.” Allegations: Company’s total debt was more than doubled on the balance sheet. Forgery and bankruptcy are some other allegations.”
- (Tanzi admitted that there was a hole of €8bn in Parmalat's accounts but denied any cover-up) - The auditors of the administration eventually determined that the debts amounted to €14.3bn, which was almost eight times the sum originally stated. - Tanzi has already admitted that he secretly siphoned off at least 500 million euros ($630 million) from Parmalat to a family-owned subsidiary - numerous shell companies were set up to generate fake profits for Parmalat and subsidiaries - Among the questionable accounting practices used by Parmalat: it sold itself credit-linked notes, in effect placing a bet on its own credit worthiness in order to conjure up an asset out of thin air. - recognized inter-company revenues
- Parmalat’s finance director, Fausto Tonna, has told interrogators that he participated in a “cut and paste” forgery, in which a document with Bank of America letterhead was scanned and then...
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