Suchergebnisse

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  Case 5: Phar-Mor (1992)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …, but it was disbursed on a Phar-Mor bank account. The travel agent thought it odd that Phar-Mor would be paying these expenses. Since she was an… …activities and helped to expose an intricate accounting fraud. The fraud was carefully carried out over several years by persons at different organ-… …inventory system did not include a perpetual inventory record. The company contracted with an outside firm to physically count and provide the retail price… …submitted a report on their physical count, Phar- Mor accountants would prepare an “inventory compilation packet” for each store and for corporate… …Coopers & Lybrand recklessly overlooked. It should have caused an experienced retail auditor to have suspicions about inventory at Phar-Mor. But Coopers &… …syndrome”. He had an “unquenchable thirst for winning”, no achievement was enough for him, and he ravenously sought new thrills. How- ever, in the summer of… …1992, Monus’s illusion of success came to an abrupt end when his empire collapsed almost overnight. References: Albrecht, W. Steve / Albrecht…

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  Case 6: Bausch & Lomb (1994)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …. In late 1994, following an article in the December 19 edition of Business Week magazine, the SEC began to focus on the booking of sales at Bausch &… …received an anonymous letter from a group of concerned APD employees asserting the fraudulent booking of sales by local management. In response, a Bausch &… …Lomb audit team began an internal investigation. By the autumn of 1994, they uncovered an elaborate scheme at the division’s Hong Kong offices to boost… …recognized revenue in the APD and the CLD. The SEC concluded that the company had made materi- ally false and misleading financial statements that led to an…

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  Case 7: Waste Management (1997)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Accounting Fraud in U.S. Companies 55 Case 7: Waste Management (1997) The Waste Management case provides an anatomy of an accounting… …portrays an accounting fraud perpetrated by the highest-ranking officers at WMI. As the scheme unravelled in 1997, the news sent WMI’s stock value tumbling… …material and that Andersen could issue an unqualified audit opinion on the com- pany’s 1993 financial statements. In 1994, WMI continued to engage in the ac-… …client”. It indicated that WMI actively managed re- ported results, had a history of making significant fourth quarter adjustments, and was in an industry… …agement’s netting of the gains and charges and the lack of disclosures. We have communicated strongly to management that this is an area of SEC exposure. We… …company had previously worked as an auditor at Andersen. – During the 1990s, 14 former Andersen employees worked for WMI, most often in key financial… …typed up an agreement that laid out 32 changes in prac- tices that WMI would have to undertake over time to make its finances more truth- ful. The signed… …complaint, WMI and its outside auditor constituted an agreement to cover up past frauds by committing additional frauds in the future. The SEC believed that… …management consistently refused to make these adjustments. Instead, WMI secretly entered into an agree- ment with Andersen to write off the accumulated… …paid by an audit firm in an enforcement action brought by the SEC. Besides, three audit partners were fined individually. Some believe that Andersen…

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  Case 8: Sunbeam (1998)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …1997 earnings. “What an amazing year we had.” So proud was the CEO that he opened his letter to shareholders with the following self- congratulatory… …truth became known. Barron’s published an article noting that Sunbeam had negative operating cash flow in 1997, and suggesting that all the company’s… …Sunbeam’s board to begin an internal investigation. This resulted in the termination of Dunlap and Kersh, and extensive restatements of earnings from the… …Sunbeam officers had created the illusion of a successful restructuring to inflate its stock price and thus improve its value as an acquisition target. If… …the company had been sold at an inflated share price, Dunlap and Kersh could have reaped millions of dollars from the sale of their Sunbeam securities… …from accounting fraud. Dunlap was ordered to pay a USD 500,000 fine and had to accept a lifetime ban from ever serving again as an officer or… …. Uzzi, the SEC also sought permanent bars from acting as an officer or director of any public company.) Neither admitting nor deny- ing allegations… …former financial vice president testified in an ac- count that strongly resembles the SEC allegations in the Sunbeam case: “Dunlap would say, in substance… …special report – An Executive’s Missing Years: Papering Over Past Problems, The New York Times, July 16, 2001 Former Sunbeam Chief Agrees to Ban and a…

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  Case 9: Cendant/CUC (1998)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …president and COO. Commenting on the fraud, one FBI agent said: “Some people have referred to this as a case of earnings management. But this is an attempt… …Street analysts expected. In the earlier years, however, an important part of the fraud was improper revenue and expense recognition. CUC stated that its… …had nothing to do with business synergies; in- stead, they provided opportunities to create overstated acquisition-related reserves. Whenever an… …record USD 2.83 billion to disgruntled shareholders who had sued the company over the fraudulent accounting practices. In an unusual turn of events… …that he was a “visionary” and an “idea man” who was igno- rant of company finances. He blamed subordinates for the fraud. Forbes’s lawyer said his… …jury was not convinced of these arguments. Henry R. Silverman, Cendant’s CEO, maintained that he was an innocent victim of the fraud. Ever since the… …(Cendant’s travel distribution opera- tions) was sold to an affiliate of the Blackstone Group. The Cendant unit changed its name to “Avis Budget Group”, to…

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  Case 10: MicroStrategy (2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …and CEO, Michael Saylor, gained widespread attention for his announced plan to donate USD 100 million to start an Internet university that would… …some problems. In October 1999, the Center for Financial Research and Analysis (CFRA) had warned investors about an unusual revenue-gathering… …transaction that had been first disclosed by MicroStrategy in an October 5, 1999, press release. In the release, the company had announced a USD 52 million… …licensing agreement with NCR Corp., whereby MicroStrategy “invested” in an NCR partnership, and NCR, in re- turn, purchased software products from… …MicroStrategy. Howard Schilit, the presi- dent of the CFRA, had referred to that practice as a “boomerang”. Moreover, in February 2000, an article in Forbes… …reached USD 33 on April 13, 2001. Following the meltdown, the SEC launched an investigation into MicroStrategy’s accounting practices. It turned out… …executives had established a pattern to refrain from signing major contracts (and giving them an “effective date”) until after the end of a quarter. Then… …Lynch consented to an administrative order barring him from practicing before the SEC as an accountant (with the right to reapply after three years)… …governance and compliance. These changes included creating an internal audit department, appointing an inde- pendent director with experience in public… …to the letter and the spirit of the accounting rules,” SEC enforcement director Richard H. Walker said in a statement. The SEC also launched an…

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  Case 11: American Tissue (2001)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …subsidiaries. The company itself was owned by an entity called “Middle American Tissue”, which had no other assets and which, in turn, was owned by “Super… …understand U.S. business ways nor did he have a col- lege degree in accounting or an MBA. Nourollah Elghanayan, American Tissue’s co-founder and chairman…
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 12: Enron (2001)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …complex transac- tions and accounting issues. U.S. Senator John Dingell commented: “What we are looking at here is an example of superbly complex financial… …originated a strong reaction (possibly an overreaction) from the regulatory bodies as well. Thus, it is of great importance to understand what actually… …Enron from a natural gas supplier into a gas-trading company that served as an intermediary between producers and end users. In a deregulated natural… …of the rapid transformation from a sleepy bricks-and-mortar pipeline business into an energy-trading juggernaut, Enron was rated for several… …, an Enron vice president of corporate development, wrote a letter to Kenneth Lay expressing concerns about the firm’s accounting. She described her… …Andersen, so the matter could be investigated further. October - An Arthur Andersen lawyer reminded a senior audit partner that company policy was not to… …million in losses from 1997 to 2000 as well as an additional USD 658 million in liabilities for 2000 (November 8). - Enron entered a merger agreement with… …the proposed merger (November 28). - The stock closed at an astonishing 26 cents a share (November 30); just fifteen months previously the shares had… …hit an all-time high of USD 90.56. December Enron filed for Chapter 11 bankruptcy protection in New York, with stated balance sheet debt of USD 13… …been the result of an elaborate accounting hoax orchestrated by the company’s most senior executives. For years, Lay and Skilling had deceived…

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  Case 13: WorldCom (2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …, Mississippi-based company was one of the pioneers of the telecommunica- tions boom, doing deal after deal in an industry that had never been hotter. Ebbers’s… …ability to manage the internal operations of what was then an immense company, and to do so in an industry-wide downturn. He was spectacularly unsuccessful… …employee, Cynthia Cooper. She was part of an internal audit team checking the books on behalf of the newly appointed CEO, John Sidgmore, who had taken over… …advised of the issue, took it seriously and directed prompt attention to it. On June 20, Cooper attended an audit committee meeting at which Sullivan was… …given an opportunity to explain and justify his ac- counting strategy. When he could not justify the accounting, he was asked to resign. As Sullivan… …accordance with US-GAAP. This manipulation enabled WorldCom to de- clare an enormous profit in its most recent report whereas it would have reported a huge… …profits had been manufactured through improper accounting. The news catapulted WorldCom into the top tier of companies reeling from an accounting scandal… …later, WorldCom announced that it had dis- covered an additional USD 3.3 billion in improperly reported earnings for 1999, 2000, 2001, and first quarter… …corded the operating activities of WorldCom’s sales channels. They were reported in an attachment to the Monthly Revenue Reports (“MonRevs”); distribution… …released without any analysis of whether the company actually had an excess accrual in the account. Second, even when it had excess accruals…

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  Case 14: Dynegy (2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …April 2001, an unconsolidated special purpose entity called “ABG Supply” entered into a five-year contract with Dynegy. Under the contract, Dynegy… …allowed Dynegy to enhance cash flow from operations by USD 300 million (or 37%), and to achieve an Alpha-linked USD 79 million tax benefit. The company…