Control Activities: Only a few control activities were established for Adelphia. Large sums of money from Adelphia and various subsidiaries were merged together that the Rigas family had access to and could withdraw from at any time. There was not anyone who investigated such withdrawals and if it was necessary for the operations of Adelphia. This, ultimately led to earnings being inflated known as, “co-mingling” (Adelphia Communications). Additionally, management had the ability to override various policies, in which they did. For instance, with cash transactions that exceeded one million dollars, Tim Rigas had to approve such cash transactions to his father John Rigas. With ineffective corporate governance in place (as mentioned above), …show more content…
Within Adelphia, there were assessments in regards to the company being over-leveraged. While knowing this, the Rigas family continued to work together and cover their tracks “to conceal the borrowings and inflate earnings” (Markon and Frank); rather than combating such issue of leveraging resulting in the fall of stock prices from the recession- in the late 1990s and early 2000s. Additionally, it seemed that employees and management of the company were ignorant to the fact of Adelphia being susceptible to such fraud. While many employees continued to add on to the fraud that the Rigas were committing, management did nothing to be able to stop such activity. They did not consider such activity or have controls set in place to detect such …show more content…
Due to such lack of monitoring, management continued to be unaware of such transactions that continued to impact the company negatively. This provided the Rigas family many opportunities to override controls since the lack of corporate governance enabled the decisions to be made by Rigas family without oversight. For example, the article “Adelphia Officials are Arrested, Charged with ‘Massive’ Fraud” discuses how Timothy Rigas had to limit himself to $1 million a month of compensation that was withdrawn from the company for personal use. All decisions were continuously made by such members of the family, in which case for Adelphia, was the team of management. With the lack of controls creating opportunity, they were free to do what they wished- which is something they took incredible advantage
1. Wake County health officials are claiming that social networking apps are partly to blame for the sharp increase in syphilis cases around the area. According to the state Department of Health and Human Services, As of Friday, March 18th, there has been a recorded 1,113 early syphilis infections that were diagnosed in 2014, in the entire state as well as county, which is a 62 percent increase from the previous year, when 688 cases were reported. The article states that Wake County saw a total of 233 reported cases of syphilis last year, marking a 15-year high. A Wake County public health division director by the name of Sue Lynn said that when patients who contracted syphilis were interviewed in Wake County, many said they met their partner
Phar-Mor was known as one of the major discount chain retailers in the late 1980’s - early 1990’s. It was founded by Mickey Monus, a gambler in nature, who with the help of senior management was “cooking the books” for years to cover up his loses. The reason why senior management agreed to do this fraud is the belief in unique ability of their leader to fix everything later on. This case is known as one of the biggest accounting frauds in the corporate history of the U.S. This paper will analyze who was affected by this fraud, the motives behind it and what systems of control failed to prevent it.
Dennis Kozlowski was living his dream as a multimillionaire and if anyone got in the way of his dream to create his empire then they would be stepped on like a bug. This is what happened to Jeanne Terrile at Merrill Lynch. Terrile smelled something funny coming from Tyco and when she acknowledged that something was wrong, she was shut down quickly. Nobody knows for sure if Kozlowski paid off the CEO of Merrill Lynch, David Komansky, or not and nobody knows what they talked about. The fact is that Jeanne Terrile was replaced and the stock recommendation for Tyco soon changed after their talk. Terrile decided to do what she thought was right and make sure to notify people of what she thought of the company. Because of Terrile’s ethical decision
Not only were millions of Americans been put out of work due to these manager’s actions, the American financial markets themselves were pushed to the brink of collapse. Despite the fact that the global financial markets, in reality, are not perfectly efficient, there is a corrective mechanism built into the day-to-day trading in the market. When prices are driven down by large sells, either by large investors or a movement in a stock, there are usually new buyers for these stocks at the cheaper price. Managers of...
Leveraged buyouts may have turned huge profits for investors, but many of the lower class citizens detested these buyouts and the negative impacts on their lives. The job cuts and increased unemployment are both commonly seen after a leveraged buyout, because the new company experiences a lot of debt. Even though Kravis stated, “it is not [their] intention to dismember the company or have any mass firings of employees” , the management along with KKR still released many employees and sold off large parts of the company. Although it was done to help the company try to overcome the debt, people were not happy.
Although there are no over-the-counter (OTC) medications to treat or cure syphilis, if diagnosed early, it can be easily treated and cured. For most cases of syphilis, a single intramuscular shot of Benzathine penicillin G can be given to cure individuals during the primary and secondary stages of the disease. Receiving a series of three intramuscular injections of Benzathine penicillin G over a specified period can treat those in the latent stage of syphilis (CDC, 2016a). Those individuals who have reached the tertiary stage may be required to be hospitalized to receive daily intravenous penicillin therapy (NIAID, 2016). Penicillin is also the recommend drug for treating women who are pregnant, and is considered to be extremely effective in
This is actually an example of mixed corporate governance. There are independent board members in order to make sure that the operational and financial health of the company can gauged accurately from time to time. Peter Langerman did an in depth enquiry into the financial matters just because Dunlap had offered to resign in response to a trivial question. The board should have kept a watch on the firm’s financial health from the beginning. But after realising the gravity of situation, board was prompt and unanimous in firing Albert Dunlap which shows good corporate governance.
In modern day business, there can be so many pressures that can cause managers to commit fraud, even though it often starts as just a little bit at first, but will spiral out of control with time. In the case of WorldCom, there were several pressures that led executives and managers to “cook the books.” Much of WorldCom’s initial growth and success was due to acquisitions. Over time, WorldCom discovered that there were no more opportunities for growth through acquisitions when the U.S. Department of Justice disallowed the acquisition of Sprint.
fraud – three in the Rigas family, two other executives held, accused of mass looting. The
In support of their main thesis, the authors draw the attention of the readers to several issues that the company may face that may derail
...company workers being affected by the financial crisis. We don’t want to point fingers here only assess the ethical dilemmas that these companies face. Subjective human judgment opens up for the possibility of undesirable human biases and manipulation. However, with or without human judgment, financial models of credit risk are subject to manipulation, both legally and fraudulently.
During the prologue, it is described that a financial analyst, Meredith Whitney, made national headlines for successfully predicting that Citigroup firm needs to “slash its dividend or go bust.” This book makes gives the impression that Whitney started the beginning of the economic collapse. This seems unlikely; Whitney only made the prediction that she made based off of her analysis of the markets. Fortunately, she gained the nation's ear. She called out all Wall Street firms and told them that their investments and mortgages were worthless. She was bold and truthful when the everyone else doubted her.
would let them in on the corruption that when on. The firm had a tight control
The Tyco accounting scandal is an ideal illustration of how individuals who hold key positions in an organization are able to manipulate accounting practices and financial reports for personal gain. The few key individuals involved in the Tyco Scandal (CEO Kozlowski and CFO Swartz), used a number of clever and unique tactics in order to accomplish what they did; including spring loading, manipulating their ‘key-employee loan’ program, and multiple ‘hush money’ payouts.
Leeson’s career began to go down hill, when he started hiding his losses. He hid his growing losses in the error folder 88888. This folder was originally created for a co-worker who had accidently caused a loss of 20,000 pounds. Nick Leeson was not the only one at fault. His superiors had made the fatal mistake of allowing him to check his own trades. This job is usually given to a co-worker or a superior. By December 1994 his losses rose to 512 million pounds. He became desperate to repay his losses. This caused him to bet that the Nikkei index would not drop below 19,000. Needless to say this did not happen. Japans economy was on the rise after a 2year 6month recession, but Leeson’s hopes were dashed when an earthquake hit Kobe. This led to huge losses, as the Nikkei index decreased by %7 within one weak. He hoped for a re...