Financial Statement Fraud Investigations Essay Example | Topics and Well Written Essays - 1000 words

Financial Statement Fraud Investigations - Essay Example The inventories were shared between the various stores of the company to boost sales. Various external vendors were arranged to ship merchandises of the company claiming fake discounts. Loads of merchandises were sold to wholesalers and then the receipts were spread to individual stores of the company. This illegal money was entered and circulated between the Antar family and was parked into undisclosed foreign bank accounts. The initial reports suggest that when Crazy Eddie went public about twenty years ago, its shares were traded at $8. The company’s shares have inflated 10 times during the years due to manipulation of accounts. By showing fake sales, misrepresented inventories, doctoring and window dressing financial statements, the company was able to hide its true picture of financial position from the public. Thus, the company’s stocks looked more attractive from outside than it actually was. The sales of the company never fell since the merchandises circulated b etween the various stores and was treated as revenues. Such fraudulent practices helped Crazy Eddie to maintain a healthy double-digit growth and consequently inflated the company’s share prices. ... Due to this, the creditors got the impression that the company’s demand was unmatched and hence they extended the credit period. The payments of actual sales were made in installments. Each installment of a particular sale was treated as individual sales. The sharing of inventories between some forty stores helped the company conceal true facts. The scope of Examination Financial statement frauds challenges the integrity and corporate social responsibility of companies. These frauds may be malpractices in the form of intentional misrepresentation, alteration of financial reports, falsification, doctoring business documents and business transactions, deliberate window dressing and misapplication of accounting policies, inflating sales and inventories, bribes, fictitious revenues, over or understatements in financial statements, and so on. The financial statement fraud examination aims to implement integrity and CSR in all companies by encouraging transparent, reliable, and inve stor-friendly financial statement. Financial statement examination justifies the concept of audits and establishes the confidence of society as well as all market participants. It tries to make the capital market more efficient by providing perfect information for all participants. Financial scandals not only ruin the repute of the company, it might also create negative sentiments in capital markets, affects the nation’s economic growth and prosperity. It gives the culprits one more chance to plead guilty and rectify accounting practices and malpractices. Fraud examination can help protect the company’s minority shareholders’ from potential bankruptcy or substantial economic loses.  

Application of Management Functions to a Case Study

Application of Management Functions to a - Case Study Example As a new manager, I would choose planning to guide me in the management of the hospital. In any business or an organization, entity that focuses on growth and offering quality services to their customers planning is essential (Kerzner, 2013). According to Kerzner, (2013) planning is one of the basic management functions; it involves the use of the available resources to ensure maximum production of goods or solving of peoples wants and needs. Planning ensures maximization of the resources available for production. Additionally, it ensures that the economies of scale are optimized to ensure growth of the organization. Since the merging brings together two entities with different philosophies and way of doing things, planning will be essential to adopt them into our ways of doing things. Additionally, we have to absorb some of the staff who was working in the small hospital. Absorbing the staff can only be possible through effective planning (Kerzner, 2013). Further, Johnson (2013) stated that planning ensures that our goals are clearly set to prevent any conflicts of interest in the newly merged hospital. I will ensure that the goals outlined clearly by writing and follow up to ensure, all the responsible people work hard to ensure the realization of the goals. Additionally, it can come up with a proposal by which the hospitals goals are pinned on all notice boards of the entire hospital. A goal also doubles up as the objectives of the hospital. Objectives are the laid down principles that act as a guide to every organization success. The success of any organization is measured through; the achievements are compared to the set goals. After the merger of the two hospitals, my main goals will include. To increase the number of staff, to start an expanded laboratory facility and to come up with a new registry that will be holding all the records of patients and their affiliates. Secondly, planning shall be essential in my efforts in setting down of