...Week 7 Assignment 2: Cardillo Travel Systems, Inc. Jerrod A. Johnson ACC562 Dr. J. Olajide, Instructor February 23, 2014 Explain the Securities and Exchange Commission’s rationale to charge Cardillo with each of the following violations: * Making false representations to outside auditors * Failing to maintain accurate financial records * Failing to file prompt financial reports with the SEC * Violating the insider trading provisions of the federal securities laws Within the mission statement of the U.S. Securities and Exchange Commission it declares that: “… all investors, whether a large institution or private individuals, should have access to certain basic facts about an investment…” Cardillo Travel Systems, Inc., its chairman and chief executive officer A. Walter Rognlien, its president and chief operating officer Esther I. Lawrence and its vice president of finance William Kaye all attempted to defraud auditors and the general public by presenting financial documents that contained misleading information. It is the responsibility of the SEC to protect the investor, whether large or small, from organizations that intentionally misrepresent themselves financially or take advantage of information that the general public is not privy too in order to better their financial situation. This is done so that we can make informed decisions about potential investments and to maintain a fair marketplace. Determine who was in violation or compliance...
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...Cardillo Travel Systems Jennifer Aponte Professor Bunney Schmidt ACC 562 May 24, 2015 Week 7 assignment Fraud is a major problem for organizations all over as it involves theft and fraudulent financial statements. As the number of individuals involved increases, fraud expands and worsen within a company since there are more people supporting the wrong acts instead of doing what is right. Cardillo Travel Systems was the largest company in the travel agency industry in the 1980’s where it was first listed on the national stock exchange. The CEO of the company was a businessman from Los Angeles, CA named Walter Rognlien and his wife, Esther Lawrence was the President and Chief Operating Officer. These individuals were mainly concerned with doing whatever needed to get done to ensure that the entity’s financial records reflect successful information. As the top executive of Cardillo, Rognlien pressured and manipulated the controller of the company, accountants and 2 partners of public accounting firms. He wanted to conceal the actual nature of a fraudulent entry in the organization’s accounting records which ended up being unsuccessful. Luckily, not all of his employees obeyed his requests to cheat the system and the Touche Ross, the auditing firm hired by Cardillo was very careful to identify the fraudulent activity and Rognlien did not get too far with his scheme. The SEC was eventually notified and Cardillo Travel Systems eventually collapsed in 1986 and the company had...
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...Learning representative will contact you to review and confirm your order. G E T S T A R T E D Visit www.custom.cengage.com/makeityours/knapp7e to make your selections and provide details on anything else you would like to include. Prefer to use pen and paper? No problem. Fill out questions 1-4 and fax this form to 1.800.270.3310. A Custom Solutions editor will contact you within 2-3 business days to discuss the options you have selected. 1. Which of the following cases would you like to include? Section 1: Comprehensive Cases 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 Enron Corporation Just for FEET, Inc. Jamaica Water Properties Health Management, Inc. The Leslie Fay Companies Star Technologies, Inc. Lincoln Savings and Loan Association Crazy Eddie, Inc. ZZZZ Best Company, Inc. United...
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...• Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States CONTENTS SECTION 1 Comprehensive Cases 1 Case 1.1 Enron Corporation 3 Arthur Edward Andersen established a simple motto that he required his subordinates and clients to invoke: "Think straight, talk straight." For decades, that motto sewed Arthur Andersen & Co. well. Unfortunately, the firm's association with one client, Enron Corporation, abruptly ended Andersen's long and proud history in the public accounting profession. K Y TOPICS: history of the public accounting profession in the United States, scope of E professional services provided to audit clients, auditor independence, and retention of audit workpapers. ; Case 1.2 Just for FEET, Inc. 23 In the fall of 1999, just a few months after reporting a record profit for fiscal 1998, Just for Feet collapsed and filed for bankruptcy. Subsequent investigations by law enforcement authorities revealed a massive accounting fraud that had grossly misrepresented the company's reported operating results. Key features of the fraud were improper accounting for "vendor allowances" and intentional understatements of the company's inventory valuation allowance. K Y TOPICS: applying analytical procedures, identifying inherent risk and control risk E factors, need for auditors to monitor key developments within the client's industry assessing the health of a client's industry, and receivables confirmation procedures. Case 1.3 Jamaica Water P...
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