Case Study Jamaica Water Properties

Topics: Fraud, Big Four auditors, Financial audit, Finance, Chief executive officer, Audit / Pages: 11 (3513 words) / Published: Dec 14th, 2014
Case 1.3
Jamaica Water Properties

Prepared by

Alex Gonzalez

for

Professor C.E. Reese

in partial fulfillment of the requirements for

ACC 540 – Fraud Examination

School of Business / Graduate Studies

St. Thomas University

Miami Gardens, Fla.

Term A7 / Fall, 2014

October 24th, 2014

Table of Contents
Issues 1
Facts 1
Analysis 7
Conclusions/Recommendation 7
References/Bibliography 7

Issues
1. In David Sokol’s position, after discovering the suspicious items in JWP’s accounting records, would you have taken a different course of action than he did?
2. What measures can and should be taken to make it easier for corporate employees to “blow the whistle” on a fraudulent scheme they uncover within their firm?
3. Should businesses, accounting firms, and other organizations explicitly reward ethical behavior by their employees and executives?
4. What are the measures that accounting firms can take to reduce risk that personal relationships between client personnel and members of an audit engagement team will adversely affect the quality of an audit?
5. Do you believe the 1988 “retention agreement” that Ernst & Young made with JWP was appropriate?
6. Why do you believe that Ernst & Young agreed to pay a large settlement to JWP’s stockholders but chose to contest the lawsuit filed against it by the insurance companies?
Facts
In 1990, David Sokol faced a problem that has stymied the careers of many business executives. AT the time, Sokol served as president of Ogden Projects, Inc., an environmental services company. Sokol was motivated on becoming the company’s chief executive officer (CEO) but the bosses son stood in his way. Company insiders believed that the chairman of the parent company Ogden Corporation had already decided to appoint his son as the next CEO of Ogden Projects. Sokol in this year resigned and left back home to Omaha, Nebraska. In 1991, Sokol quickly landed a job with a large Omaha construction and mining



References: Bibliography W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht and Mark F. Zimbelman “Fraud Examination ”, Fourth Edition, South-Western Cengage Learning, 2012. Print. Kelly, J. & Datta, A. (2009). Does three strikes really deter? A statistical analysis of its impact on crime rates in California. College Teaching Methods & Styles, 5(1), 29-36.

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