Aaron Beam Case Study Marsha Stevens

Topics: Richard M. Scrushy, Morality, 1952 births Pages: 4 (844 words) Published: April 28, 2015
Aaron Beam – Marsha Stevens
Running Head: Aaron Beam

Aaron Beam Case Study

University of Central Oklahoma

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Aaron Beam – Marsha Stevens

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INTRODUCTION
Aaron Beam was a certified public accountant that met a very charismatic businessman and chief operating officer named Richard Scrushy. Scrushy worked for a healthcare company called Lifemark Corporation. In 1983, after getting to know each other for a while, Scrushy invited Beam to join him in starting a new company named HealthSouth. This company would provide medical rehabilitation services to hospitals and their patients in the Birmingham, Alabama area. The company was started in 1984 with Scrushy as CEO and Beam as CFO. Beam quickly found that Scrushy a cult-like figure who could persuade others to do things his way. Scrushy made it clear to Beam that he wanted him to do whatever necessary to make the company look good to investors and stakeholders. They grew the company to a Fortune 500 level all while making the finances look better than they were. Beam at first considered this an aggressive accounting strategy until Scrushy asked him to intentionally fix the company’s books by doing intentionally fraudulent activity. Beam inserted small entries into the company ledgers which resulted in the company, Scrushy, and Beam, a lot of money. Beam convinced himself he would do it just one time, but when it became harder and harder to cover up because earnings kept falling short of Wall street expectations, the fraudulent amounts became higher and higher and more frequent. Beam was losing sleep and felt very guilty but could not stand up to Scrushy and was so deep into it, the only choice he thought he had was to keep going with the fraudulent activity. Finally, after the guilt was too much, he retired in 1997. Beam thought that he had gotten out before the ship could sink. However, in 2003, the FBI began investigating Scrushy to determine if he was a part of an insider trading scheme. So instead...
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