Case 2-9 Phar-Mor I feel that one major flaw in the Phar-Mor company is the fact that Mickey Monus has full control of the company and could pull off such a giant fraud scam. This is a flawed system in management. There were no checks and balances to keep this fraud from happening. Mickey Monus had so much control of those under him that he convinced them to go along with the fraud. That everything would get better soon and they would not have to worry. The ones that did know about the fraud
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|Case 4.6 | |Instructional Notes | | | |Phar-Mor‚ Inc.:
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Sean Russi The Case of Phar-Mor Inc ACCT-525 October 31‚ 2012 Case Summary The case of Phar-Mor Inc was one of the biggest pre-Enron frauds that have been uncovered. Phar-Mor Inc established in 1982 Phar-Mor was a small little known discount drugstore. Phar-Mor became well known for offering medications at a 25-40% discount rate compared to your normal pharmacy store prices. Phar-Mor’s first six years of existence seemingly were
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If there was a reckless misrepresentation and lack of due diligence in verifying accuracy of financial information that is free of material misstatements‚ that alone would give me a reason to sue the auditors. B) Negligence as it is used in legal cases involving independence auditor is defined as “failure to conduct an audit with due professional care in the performance of work” C) The primary difference between negligence and fraud is fraud is the intentional concealment or misstatement of information
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Phar-Mor‚ Inc. 1. 2 cases which companies have committed fraud by misstating inventory: • Rocky Mount Undergarment Company‚ Inc. • Leslie Fay Company 2. Intentional misstatements of inventory is difficult to detect‚ as was in the case of Phar-Mor‚ Inc.‚ because of the collusion by employees and/or management to commit fraud. 3. Coopers & Lybrand won the Phar-Mor‚ Inc. account with a very low bid‚ so they wanted to limit their costs by testing only 4 out of the 129 stores
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The Phar-Mor Code of Ethics Phar-Mor strives to be the leading retailer in providing the lowest priced and highest quality goods for our communities‚ while delivering exemplary levels of customer service. Phar-Mor believes in providing a positive and ethical working environment to help guide all employees in word and action‚ which promotes an unshakable framework of integrity and trust between all stakeholders. Phar-Mor endeavors to proactively contribute to its communities through local philanthropies
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three years. When this report was released to the public‚ the resulting damage to the market value for the company was approximately $14 billion‚ with their stock tumbling from a high of $41 down to nearly $12. At the time‚ this fiasco was the largest case of
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Phar-Mor Case Study Phar-Mor Case 4.6 Questions 1. a) By hiring a member of its external audit team a company could gain insight into the auditor’s process and better devise methods of hiding fraud. b) Hiring a former auditor would greatly compromise and possibly impair the existing external auditor’s ability to remain independent. On top of having knowledge about the auditor’s practice‚ preexisting relationships could cause bias in the audit outcome. c) Sarbanes-Oxley Act 2002 limits the ability
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the audit. I don’t feel they obtained sufficient competent evidential matter and they did not use professional judgment when they informed Phar-Mor in advance which stores
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Summary Phar-Mor‚ Inc. was a deep-discount store that had substantial growth in a short period of time. It started with 15 stores and grew to over 310 stores in thirty two states between 1985 and 1992. At first Phar-Mor was seen as a major prospect in the retail market. With sales of over $3 billion and growing‚ Phar-Mor’s success even worried some of the biggest retail giant‚ including Wal-mart. The president‚ founder‚ and COO of Phar-Mor was Mickey Monus‚ who became quite extravagant with
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