better-than-expected results. The alleged fraud gave the company a string of earning beats and a strong rise in its stock. It also allowed Diamond Foods Inc the necessary currency needed to clinch a deal to buy the Pringles snack brand from Proctor and Gamble for $2.35 billion. Everything unraveled after the Wall Street Journal and some skeptical investors questioned the company’s accounting. According the Diamond Foods Inc, they conducted an internal investigation and ultimately restated its finances
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Insight on WorldCom Scandal Table of Contents ABSTRACT 2 The importance of accounting conceptual framework 3 Historical Background 5 The Scandal – what happened 6 PENALTIES 7 How the scandal relates to accounting theory 8 RELATION TO POSITIVE ACCOUNTING THEORY 9 Conservatism Principle 9 Lack of Reliability 10 Lack of Relevance 11 Financial Misstatement 11 Conclusion 12 Bibliography 14 Insight on WorldCom Scandal ABSTRACT The scope of this paper deals with the
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which is a World Council for Corporate Governance, Satyam became the centerpiece of a massive accounting fraud. As stock markets around the world collapsed during 2008, the Indian Stock Exchange fell enormously. The enormous losses caused investors to withdraw large amounts of cash from their investments. These cash withdrawals in turn triggered the discovery of several cases of financial fraud as perpetrators could no longer hide the results. Mr. Raju, the founder of Satyam, and the company's
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Puffery Comparing your product to that of a competitor without scientific studies to substantiate your claims could lead to charges of deception. Saying you make a better pizza is puffery. Saying two out of three people prefer your pizza when you have no studies to substantiate the claim crosses the line to deception. Literal false largely applies to promotional materials that involve statistical and testing proof of claims. The “tests prove” literal false advertising is where advertising relies
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Bernard (Bernie) Madoff will be infamously remembered as the mastermind of the largest white collar crime in history. Investigators believe he perpetuated a 30 year, $65 billion fraud by leveraging his credibility as a Wall Street insider to deceive investors, financial institutions, accountants, friends, family, and government agencies (Ferrell, 2009). Therefore, victims, investigators, industry insiders, and observers have been left to ponder, how could Madoff dupe and deceive so many people for
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Tony Moss, president of Greater Queensland Bank, received an anonymous note in his mail stating that a bank employee was making bogus loans. Moss asked the bank’s internal auditors to investigate the transactions detailed in the note. The investigation led to James Guy, manager of a North Queensland branch office and a trusted 14-year employee who had once worked as one of the bank’s internal auditors. Guy was charged with embezzling $1.83 million from the bank using 67 phony loans taken out over
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largest possible amount of product at best term, then selling at discounts of up to 25% - 40% off retail prices. Phar-Mor Inc. had fictitious inventory, fund diversions and a fraud cover-up by management which costed its investors 500 million dollars. The first indication of financial problem came to light in 1988, when investigation of lower-than-expected profit margins revealed that Phar-Mor was being billed for inventory it had not received from its sister company, Tamco, a primary supplier. The receiving
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University of New Hampshire Scholars' Repository Honors Theses Student Scholarship Fall 2012 An Analysis of Fraud: Causes, Prevention, and Notable Cases Kristin A. Kennedy University of New Hampshire - Main Campus, kaj79@wildcats.unh.edu Follow this and additional works at: http://scholars.unh.edu/honors Part of the Accounting Commons Recommended Citation Kennedy, Kristin A., "An Analysis of Fraud: Causes, Prevention, and Notable Cases" (2012). Honors Theses. Paper 100. This Senior Honors Thesis is
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1) We don’t think Amanda should purchase the car, not without meeting with the seller and inspect the vehicle. There is no doubt that car auctions are great places for the purchase of affordable vehicles. At the same time, buyers should be cautious with the used cars. Especially for the buyers like Amanda who has a relatively low budget. The deal seemed very attractive and suspicious in the first place, because the sale price of the car was below the reasonable average value of the market in comparison
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how organizations can protect themselves from it, and multiple real-life examples, an insightful analysis of the implications of cybercrime can be better understood. Wiretapping Wiretapping has become a very common way of committing computer fraud. This occurs when perpetrators read information being transmitted between an organization’s computers. In order to decrease this, companies can implement various encryption techniques to help ensure that confidential information does not reach the
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