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You knew it was coming. Koss Corporation has sued its auditors Grant Thornton for failing to find the alleged $31 million fraud perpetrated by the company's VP of Finance over at least five years.
By January 17, 2002, Enron decided to discontinue its business with Arthur Andersen, claiming they had failed in accounting advice and related documents. Arthur Andersen was judged guilty of obstruction of justice for disposing of many emails and documents that were related to auditing Enron. Since the SEC is not allowed to accept audits from ...
SAS 99 defines fraud as an intentional act that results in a material misstatement in financial statements. There are two types of fraud considered: misstatements arising from fraudulent financial reporting (e.g. falsification of accounting records) and misstatements arising from misappropriation of assets (e.g. theft of assets or fraudulent expenditures).
Peregrine Systems [8] [10] corporate executives convicted of accounting fraud; Phar-Mor [8] company lied to shareholders. CEO was eventually sentenced to prison for fraud and the company eventually became bankrupt; Qwest Communications [10] RadioShack CEO David Edmondson lied about attaining a B.A. degree from Pacific Coast Baptist College in ...
The independent audit gave a higher number than the Kansas Department of Labor’s internal estimate of $290 million and lower than the estimate of $600 million from the Legislature’s audit ...
The audit was found to be negligent, but not fraudulent. The judge set this finding aside based on the doctrine of privity, which protects auditors from third party suits. An intermediate appellate court reinstated the negligence verdict. The case then went to the New York Court of Appeals, Judge Benjamin Cardozo presiding.
The fraud was uncovered in June 2002 when the company's internal audit unit led by unit vice president Cynthia Cooper discovered over $3.8 billion of fraudulent balance sheet entries. Eventually, WorldCom was forced to admit that it had overstated its assets by over $11 billion. At the time, it was the largest accounting fraud in American history.
"Tone at the top" is a term that originated in the field of accounting and is used to describe an organization's general ethical climate, as established by its board of directors, audit committee, and senior management. Having good tone at the top is believed by business ethics experts to help prevent fraud and other unethical practices.