Healthsouth Corp.
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY
CORPORATE GOVERNANCE : ACCOUNTING SCANDAL
SUBMITTED To : Sir. Javaid Zafar
Submitted by :
Sana Munir
MBO - II
CORPORATE GOVERNANCE
TABLE OF CONTENTS
1 COMPANY INTRODUCTION AND HISTORY................................... ...3 2 CORPORATE BUSINESS ACTIVITIES..............................................6
2.1 Rehabilitation Hospitals.................................................................6 2.2 Outpatient Therapy Services........................................................ ...6 2.3 Long Term Acute Care Hospital ......................................................6 2.4 Home Health...................................................................... ............6 2.5 Rehabilitation Technology......................................................... ......7
3 ACCOUNTING SCANDAL............................ ..................................8
3.1 To Meet Wall Street’s Expectation...................................................8 3.2 Insider Trading...................................................................... .........9 3.3 Personal Profit...................................................... .......................10 3.4 Hiding the Fraud: To Restructure........................................ ...........10
4 DETECTION OF ACCOUNTING FRAUD........................ ..................12
4.1 Red Flags .................................................................................................. .......12
5 PENALTIES FOR FRAUD............................. ................................13
5.1 Richard Scrushy............................................. ..............................13 5.2 Chief Financial Officers Charges..................................... ...............13
6 AUDITOR’S ROLE IN FRAUD................................. ......................15
6.1 Ernst and Young Auditors .......................................................... ...15 6.2 FEES paid to E&Y
CORPORATE GOVERNANCE : ACCOUNTING SCANDAL
SUBMITTED To : Sir. Javaid Zafar
Submitted by :
Sana Munir
MBO - II
CORPORATE GOVERNANCE
TABLE OF CONTENTS
1 COMPANY INTRODUCTION AND HISTORY................................... ...3 2 CORPORATE BUSINESS ACTIVITIES..............................................6
2.1 Rehabilitation Hospitals.................................................................6 2.2 Outpatient Therapy Services........................................................ ...6 2.3 Long Term Acute Care Hospital ......................................................6 2.4 Home Health...................................................................... ............6 2.5 Rehabilitation Technology......................................................... ......7
3 ACCOUNTING SCANDAL............................ ..................................8
3.1 To Meet Wall Street’s Expectation...................................................8 3.2 Insider Trading...................................................................... .........9 3.3 Personal Profit...................................................... .......................10 3.4 Hiding the Fraud: To Restructure........................................ ...........10
4 DETECTION OF ACCOUNTING FRAUD........................ ..................12
4.1 Red Flags .................................................................................................. .......12
5 PENALTIES FOR FRAUD............................. ................................13
5.1 Richard Scrushy............................................. ..............................13 5.2 Chief Financial Officers Charges..................................... ...............13
6 AUDITOR’S ROLE IN FRAUD................................. ......................15
6.1 Ernst and Young Auditors .......................................................... ...15 6.2 FEES paid to E&Y