agencies and even the government are all victims of both fraud and theft on a daily basis. Business owners are sometimes blindsided by these actions and may be unaware of the fraud due to lack of accounting experience or expertise. In almost every community, large or small, there are news stories about theft from employees. In several cases, unfortunately, the theft is from those entrusted to perform accounting functions. By the time fraud or theft is detected, sometimes thousands and even millions
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Course AC557:01: Internal Control Assessment and Design Unit 5 Final Project: Adelphia Introduction This case analysis is about the Adelphia Corporation fraud that was considered to be one of the massive corporate scandals in US history. This company did not receive as much television and news exposure as Enron and WorldCom, but the fraud the Rigas family had engaged in caused the company to sustain tremendous losses. Adelphia was considered a family owned business to the Rigas family members
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LITERATURE REVIEW 6 a. Introduction 6 b. The Need for an Audit 7 c. Risk of fraud 8 d. The Auditor-Investor ''Expectation Gap'' 9 e. Auditing Profession and Challenges 9 f. Public opinion 10 g. Family or Personal Relationship 10 h. Integrity 11 i. Inherent limitations of an audit. 11 j. Responsibility of Auditors to Third Parties – Case Law 12 k. International, Assurance Auditing, Standards Board (IAASB) 14 CORPORATE FRAUD CASES 16 CASE STUDY: 21 CONCLUSIONS………………………………………………………………………………24 REFERENCES……………………………………………………………………………
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by analyzing a “famous” fraud scandal: WorldCom Inc. The article discusses the chronology of events that lead to the WorldCom Inc. collapse and explains how the figures were manipulated for the owners’ interest and what the accounting scam was. The article ends with the consequences of the scandal and what the effects were on the society and business environment in general. JEL Classification: M4 Accounting and Auditing Key words: ethics, accounting, bankruptcy, WorldCom Inc., expenses
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Summary of Tim Durham’s Ponzi scheme The alleged fraud is over $200 million. Durham’s main holdings were his leveraged buyout firm Obsidian Enterprises, Inc. and Fair Financial Services, both headquartered in Indianapolis, IN. When Durham acquired Fair in a 2002 leveraged buyout, it was a factoring company that purchased accounts receivable from businesses at a discount, profiting when the accounts were paid in full. It financed its operations by selling “investment certificates” to individual
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company in Jackson, MS by Bernie Ebbers and grew to become a darling of the new economy and of Wall Street. Failure within a large organization WorldCom was the number two long distance provider, in July of 2002 WorldCom file bankruptcy. This was the largest bankruptcy ever in U.S. history with a $41 billion dollar debt load, and more than $107 billion dollars in assets and equipment (Ramero and Atlas, 2002). Bernard John “Bernie” Ebbers the former CEO of WorldCom grew the company into one of the
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with regard to the supply of Natural gas. Many historians and economists suspected that the Enron executives manufactured this crisis in preparation of the discovery of the fraud they had committed. The executives of Enron were enjoying the funds rendered from investments; the corporation itself was approaching bankruptcy. Enron executives are defined as the criminal activity involving the unlawful and unethical attainment of monies and funding by employees, funds that are embezzled are
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gather and investigate data that will be used in litigation. Currently though, we live in a world in which financial fraud is becoming increasingly more prevalent. Forensic accountants are expanding their roles and venturing into financial fraud prevention. Forensic accountants are utilizing their skills and designing policies to reduce the risk of fraud, and working closely fraud deterrence research. To be a forensic accountant, the individual needs to possess certain skills and abilities to
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through numerous acquisitions and adapted the name “WorldCom” in 1995. In 1998, WorldCom purchased MCI, the nation’s number two long-distance provider, for $37 billion. WorldCom, considered a major success story of the 1990s, filed Chapter 11 bankruptcy in July 2002. With 65 successful acquisitions, including 11 major companies between 1991 and 1997, WorldCom’s accumulated debts reached $41 billion with assets of $107 billion (Beltran, 2002). WorldCom operated the largest Internet network at
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existence of related parties • Fraud team included several former auditors from C & L who knew what the auditors were looking for and were thus able to hide the fraud • Fraud was discovered when a travel agent received a Phar-Mor check for World Basketball League expenses and signed by Monus (Monus was the founder of the World Basketball League) • Travel agent showed check to her landlord who was a Phar-Mor investor. Landlord called Phar-Mor CEO • Fraud resulted in the closing of 200
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