was declared bankrupt in December 200 1 after its investment partnership proved to be masking a colossal mountain of debt (around $1.2 billion). Similarly‚ Madoffs company‚ Bernard L. Madoff Investment Securities‚ was associated with a $65 billion fraud ’ that affected around 4‚800 clients worldwide‚ includíng investment banks (e.g.‚ Banco Santander‚ UniCredit‚ HSBC)‚ hedge funds (e.g.‚ Ascot Partners and Man Group PLC)‚ charities (e.g.‚ Mortimer B. Zuckerman Charitable Remainder Trust‚ JEHT Foundation)
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Case Study: How a CFO plowed himself under The three critical elements of the fraud triangle: 1) motive‚ 2) opportunity‚ and 3) Rationalization‚ clearly exist within the case of the $150‚000 embezzlement involving McKinley‚ his tractor company‚ and CFO position with the bank. McKinley’s motive‚ the driving force behind this act of embezzlement was his own self pride: his inability to deal with the fact that he had made a bad choice of investment‚ a poor investment strategy and an inability
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Case 3.1 Enron: Understanding the Client’s Business and Industry Price‚ Ria; Walters‚ Jessica 1. Inherent risk‚ a component of the audit risk model‚ refers to the susceptibility of the accounts to material misstatement‚ without regard to the systems internal controls. Inherent risk is a function of the nature of the client’s business‚ the major types of transactions‚ and the effectiveness and integrity of its managers and accountants. A clear understanding of the audit client’s business model is essential in assessing
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Employment-At-Will Case Case Example A: Elaine has sued Jerry because Jerry fired her. Elaine was on the job for two months.The job offer letter that Jerry had sent her mentioned the great career opportunities at the company and stated that her annual salary would be $30‚000. The company is an employment‐at‐will employer. Elaine was given no reason for the termination. After the termination‚ Jerry hired a man named Kramer‚ who had less job experience and education than Elaine‚ for the position
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danryoung@netzero.net Presented the Spring Meeting of the CAS New Orleans‚ Louisiana May 6‚ 2009 The Story of the AIG Accounting Scandal The Companies The Participants Regulatory Scrutiny Intensifies The Prosecution Case The Defense Case Relevant Laws and Regulations The Fate of the Participants The Companies AIG Overview (2007) World’s largest insurance and financial services company 93‚000 employees Business in 130 countries Led by Maurice (“Hank”)
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Regina Case Regina Company Inc. was known as a complacent slow-growth company and was dominated by Hoover and Eureka within the floorcare industry. Donald Sheelen was a promising young individual when he was hired first as the head of the marketing division in Regina‚ and then became its president. Shortly after becoming company president‚ Sheelen set out to make Regina the industry’s number one company and repeatedly vowed to “bomb” Hoover‚ the number one firm in the industry at the time. Sheelen
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German Jordanian University Business Ethics (316) Lecturer: Mr. Montaser Tawalbeh Case Study Enron: Were They the Crookedest Guys in the Room? Case Summary Enron has become the classic case on business ethics. Enron formed after the merger of Internorth Incorporated and Houston Natural Gas in 1985. On January 1‚ 1987‚ as part of the merger agreement‚ Ken Lay became the new CEO. In 1990‚ Ken Lay hired Jeffrey Skilling from McKinsey and Company as the Head of Enron Finance. By 1995‚
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Enron Case The internal controls that were ignored when LJM1 was created were one‚ LJM’s books were kept separate from Enron’s. LJM1 ignored some of Enron’s entries in the books that were missing. Outsiders owned less than 3% of the Special Purpose Entities equities. There was an error made by Arthur Andersen to let LJM’s financial statement to remain unconsolidated. If the financial statements had been consolidated‚ some of the errors could have been found. They may have even had some time to correct
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gas‚ but it later became a market maker in facilitating the buying and selling of futures of natural gas‚ electricity‚ broadband‚ and other products. However‚ Enron’s continuous growth eventually came to an end as a complicated financial statement‚ fraud‚ and multiple scandals sent Enron through a downward spiral to bankruptcy. During the 1980s‚ several major national energy corporations began lobbying Washington to deregulate the energy business. Their claim was that the extra competition resulting
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Enron case and the organizations involved……. 5 Background information & industry…………………………………………….. 5 Organizations and officers involved……………………………………………..6 Accounting firm and partners involved………………………………………….8 Enron’s industry………………………………………………………………….. 9 Enron’s injured parties…………………………………………………………… 10 (II) Enron’s accounting fraud and misrepresentation……………………. 11 Explanation of the fraud…………………………………………………………. 11 Damages incurred…………………………………………………………………12 Final outcome of the Case………………………………………………………
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