Phar-Mor Case Study

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There were many conditions, attitudes, and motivations at Phar-Mor that created an environment conducive for fraud that should have been identified as red flags by the external auditors. The first involved the motivations of COO Mickey Monus, who wanted to continue his extravagant lifestyle and was unwilling to allow Phar-Mor’s appearance of success to be damaged. These motivations led Monus and his executives to hide Phar-Mor's cash flow problems and make the company look profitable to investors. The fraud was made possible with the attitude and hands-off management style of CEO David Shapira who chose to distance himself from any knowledge of problems with the financial

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