Ethical Scandas And Cons Of Sploying By David G. Friehling

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Recommended: Importance of professional ethics in an organization

In today’s business world, accountants and business owners should work together in order to become aware of scandals that occur in corporate companies. Since 2008 a series of corporate scandals and collapses have highlighted the importance of effective board oversight. With the increase in technological advances and people who never invested before, began to invest in companies in the mid 1990’s to early 2000, which increased the demands for many corporate organizations. One of the largest scandals in the corporate world was known as the Madoff’s Ponzi scheme and the scandals that occurred at Enron Corporation and WorldCom.
The Sarbanes Oxley Act was enacted to restore the investor’s confidence in businesses and to detect and prevent fraud …show more content…

Friehling was the outside auditor for Bernard L. Madoff’s securities firm (BMIS) during the Ponzi scheme and also handled Madoff’s personal tax accounting. David knowingly used false records to reduce Madoff’s tax bills. He made representations that BMIS financial statements were presented in conformity with Generally Accepted Accounting Principles. He also claimed that he reviewed the company’s internal controls over the custody of assets, and found no material inadequacies. He pleaded guilty in 2009 to nine criminal counts, including securities fraud, investment-adviser fraud and violations of tax …show more content…

Some forensic accountants specialize in specific industries that are susceptible to fraud. Insurance and banking industries are considered a higher risk for fraud. These accountants learn their business practices of these fields in order to understand what is happening and be able to stop the fraud. They need to be discrete when they are conducting these investigations in order to keep the identity of the individuals and companies private. In the article, how forensic Accounting works, states that “they must be independent and impartial, taking into account both the financial records and the conduct of employees.” Forensic accountants are looking for signs of fraud as they are conducting their audits and examining financial statements to determine whether they are accurate and complete. They need to look beyond the numbers in order to discover the fraud that is taking place and anticipate criminal actions. Frisch 's Restaurants Inc. has many locations throughout Ohio, Kentucky and Indiana. In the case of Frisch’s restaurant, they are accusing Michael Hudson of manipulating accounting records and forging payroll documents to funnel money to himself, his relatives, a business associate and two companies he created. Michael was the assistant treasurer and had worked at the company for thirty two years. He started off in the accounting

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