Archives

CASE 1.10 DHB INDUSTRIES, INC. Synopsis David Brooks founded DHB Industries in the early 1990s. Throughout its existence, the principal operating unit of DHB was its Point Blank subsidiary that manufactured bullet-resistant operating results from 2003 through 2005 had been […]

CASE 1.15 LIVENT, INC. Synopsis Similar to most financial frauds, the Livent, Inc. fraud was masterminded by a few individuals, primarily Garth Drabinsky and Myron Gottlieb. However, numerous individuals were eventually management to track the company’s fireal” financial data and […]

CASE 1.13 AA CAPITAL PARTNERS, INC. Synopsis In February 2002, John Orecchio and Paul Oliver teamed together to establish an investment advisory firm, AA Capital Partners, Inc. The two Chicago businessmen had all of the necessary investments due to embezzlement […]

CASE 1.7 LINCOLN SAVINGS AND LOAN ASSOCIATION Synopsis The collapse of Lincoln Savings and Loan Association in 1989 was one of the most expensive and controversial savings and loan failures in U.S. history. Charles Keating, Jr., is seemingly the perfect […]

CASE 1.8 CRAZY EDDIE, INC. Synopsis Eddie Antar opened his first retail consumer electronics store in 1969 near Coney Island in New York City. By 1987, Antar’s firm, Crazy Eddie, Inc., was a public company with annual sales exceeding $350 […]

CASE 1.5 THE LESLIE FAY COMPANIES Synopsis Fred Pomerantz founded Leslie Fay in the mid-1940s and built the company into one of the leading firms in the highly competitive women’s apparel industry over the next four decades. Fred’s forced to […]

CASE 1.9 ZZZZ BEST COMPANY, INC. Synopsis Barry Minkow founded ZZZZ Best Company, a carpet cleaning concern, in 1982 at the age of 16. Within a matter of months, Minkow was engaging in several fraudulent schemes to raise working capital […]

CASE 1.14 NAVISTAR INTERNATIONAL CORPORATION Synopsis Navistar International Corporation traces its roots back to Cyrus McCormick, the famous 19th century American inventor. This case, however, begins in the 21st century when Navistar fired its During the midst of Navistar’s accounting […]

CASE 1.6 NEXTCARD, INC. Synopsis In November 2001, Arthur Andersen & Co. employees in that firm’s Houston office shredded certain Enron audit workpapers during the midst of a federal investigation of the large energy tended to be high credit risks, […]

CASE 1.2 LEHMAN BROTHERS HOLDINGS INC. Synopsis Wall Street was stunned in September 2008 when this iconic investment banking firm filed for bankruptcy. Two years later, there was a similar reaction within the investment community when Lehman’s court-appointed bankruptcy examiner […]

CASE 1.4 HEALTH MANAGEMENT, INC. Synopsis This case profiles an imaginative accounting fraud orchestrated by two top executives of Health Management, Inc. (HMI), a New York-based pharmaceuticals distributor. The HMI fraud is audit firm. The plaintiff attorneys attempted to prove […]

CASE 1.1 ENRON CORPORATION Synopsis Arthur Edward Andersen built his firm, Arthur Andersen & Company, into one of the largest and most respected accounting firms in the world through his reputation for honesty and integrity. window dress its financial statements. […]

CASE 1.11 NEW CENTURY FINANCIAL CORPORATION Synopsis New Century Financial Corporation’s bankruptcy filing in April 2007 was the initial incident in a series of events that would eventually plunge the U.S. and global economies into full-fledged panics. declining. Suddenly, subprime […]

CASE 1.12 MADOFF SECURITIES Synopsis A childhood friend summed up the driving force in Bernie Madoff’s life: fiBernie wanted to be rich.” As a youngster growing up in New York City, Bernie realized that Wall Street was the Unfortunately, Bernie […]

CASE 1.3 JUST FOR FEET, INC. Synopsis Harold Ruttenberg emigrated to the United States from South Africa in 1976. In his early thirties at the time and the father of three small children, Ruttenberg wanted to escape the political and […]

CASE 2.6 CBI HOLDING COMPANY, INC. Synopsis Ernst & Young audited the pharmaceutical wholesaler CBI Holding Company, Inc., in the early 1990s. In 1991, Robert Castello, CBI’s owner and chief executive, sold a 48% stake in his company to TCW, […]

CASE 2.7 GEO SECURITIES, INC. Synopsis In the late 1990s, Geo Companies of North America (GNCA), a small Dallas-based company, organized a wholly-owned subsidiary, Geo Securities, Inc., to market interests in oil and gas properties that it owned or controlled. […]

CASE 2.3 TAKE-TWO INTERACTIVE SOFTWARE, INC. Synopsis Grand Theft Auto is the sixth best-selling video game “franchise” of all time and easily ranks among the most controversial as well. The game’s “adult” content has resulted in caustic and unrelenting criticism […]

CASE 2.8 BELOT ENTERPRISES Synopsis David Robinson, an audit senior assigned to the audit engagement team for Belot Enterprises, faces a dilemma common to auditors. Client management has taken an aggressive position regarding the period-ending balances of several large discretionary […]

CASE 2.5 LIPPER HOLDINGS, LLC Synopsis Media reports described Kenneth Lipper as a “bon vivant” and “renaissance man.” Lipper, the son of a shoe salesman, grew up in a modest working-class neighborhood in the South Bronx. A childhood friend of […]

CASE 2.2 GOLDEN BEAR GOLF, INC. Synopsis According to one sports announcer, Jack Nicklaus became “a legend in his spare time.” Nicklaus still ranks as the best golfer of all time in the minds of most pasture pool aficionados— granted, […]

CASE 2.1 JACK GREENBERG, INC. Synopsis In the mid-1980s, Emanuel and Fred Greenberg each inherited a 50 percent ownership interest in a successful wholesale business established and operated for decades by their father. Philadelphia-based Jack Greenberg, Inc., (JGI) sold food […]

CASE 2.4 GENERAL MOTORS COMPANY Synopsis Billy Durant created General Motors Corporation in 1908 when he merged several automobile manufacturers that he had acquired over the previous few years. For most of the 20th century, GM reigned as the largest […]

CASE 2.10 LOCATEPLUS HOLDINGS CORPORATION Synopsis The management team of LocatePlus developed a New Age business model but relied on an old- fashioned fraud scheme to burnish their company’s financial statements. LocatePlus collected a massive database that consisted of information […]

CASE 2.9 POWDER RIVER PETROLEUM INTERNATIONAL, INC. Synopsis Brian Fox, a Canadian with a background in the oil and gas industry, took control of Powder River in late 2003. Fox became not only the principal stockholder of the small company […]

CASE 3.1 THE TROLLEY DODGERS Synopsis In this brief case, a longtime and trusted employee of the Los Angeles Dodgers engaged in a large scale payroll fraud to embezzle funds from the organization. Over a period of several years, this […]

CASE 3.3 UNITED WAY OF AMERICA Synopsis Unfortunately, embezzlement and other fraudulent schemes are rife in the charity “industry.” More than any other segment of our economy, the charitable sector has been plundered by con artists and other miscreants in […]

CASE 3.4 FIRST KEYSTONE BANK Synopsis In January 2010, three tellers of a small branch of First Keystone Bank were arrested by local law enforcement authorities and charged with embezzling more than $100,000 from the branch’s ATM over a period […]

CASE 3.2 HOWARD STREET JEWELERS, INC. Synopsis A common nemesis of small businesses is employee theft. Small business owners who place too much trust in their employees can suffer significant financial losses at the hands of apparently hard-working and trustworthy […]

CASE 3.9 WAL-MART DE MEXICO Synopsis When Congress passed the Foreign Corrupt Practices Act (FCPA) in 1977, corporate accountants and independent auditors feared that the new law would create major headaches for them. That fear was unwarranted . . . […]

CASE 3.8 THE BOEING COMPANY Synopsis In January 2007, Matthew Neumann and Nicholas Tides, two Boeing employees, transferred to the large aerospace company’s internal audit department. The two men expected that their new jobs would put them on a “fast […]

CASE 3.6 BURANELLO’S RISTORANTE Synopsis Employee theft is a widespread and serious problem facing the multitude of small businesses that play such a critical role in the U.S. economy, which is the key reason that phenomenon is a focal point […]

CASE 4.9 ACCUHEALTH, INC. Synopsis Suppose that you were hired by a company to serve as its chief accounting officer. A few months later, you stumble across evidence of a large embezzlement scheme within the company, a scheme masterminded by […]

CASE 4.8 DELL INC. Synopsis Dropping out of college is a decision that most people ultimately live to regret. Michael Dell is clearly one of the exceptions to that rule. Dell left the University of Texas after his freshman year […]

CASE 4.10 WICHITA FALLS Synopsis This brief case revolves around the accounting firm that has been registered with the Texas State Board of Public Accountancy longer than any other firm. Freemon, Shapard & Story (FSS) was founded in 1920 in […]

CASE 4.1 CREVE COUER PIZZA, INC. Synopsis In the early 1990s, the accounting profession was shocked when the news media revealed that for several years a Missouri CPA had funneled confidential financial information regarding a client to the IRS. The […]

CASE 5.4 IPOC INTERNATIONAL GROWTH FUND, LTD. Synopsis Guy Enright, a KPMG employee, unwittingly became a pawn in an international chess match of corporate espionage. Representatives of Diligence, Inc., a London–based “business intelligence” firm, persuaded Enright to give them copies […]

CASE 5.2 AMERICAN INTERNATIONAL GROUP, INC. Synopsis AIG has a long and proud history in the global insurance and financial services industry. However, that proud history was easily overshadowed by the adverse publicity received by the huge Joseph wrote SAS […]

CASE 5.6 RYDEN TRUCKING, INC. Synopsis An all too common problem that business owners face is dealing with dishonest employees. This case examines this problem in a public accounting context. A staff accountant of a Seattle-based accounting firm embezzled more […]

CASE 5.7 RICHARD GRIMES, STAFF ACCOUNTANT Synopsis This brief case revolves around a set of circumstances involving a staff accountant with a Big Four audit firm who unintentionally “eavesdropped” on a conversation involving two client executives. The young auditor happened […]

CASE 5.5 PHILLIPS PETROLEUM COMPANY Synopsis How many auditors would serve time in jail to protect the confidentiality of a client’s financial records? This case profiles one principled audit partner who did just that. Bill Grant, managing partner of Arthur […]

CASE 6.1 LEIGH ANN WALKER, STAFF ACCOUNTANT Synopsis In this case, a staff accountant of a large, international accounting firm is dismissed by her employer when her integrity is questioned by a senior auditor. The staff accountant had told the […]

Case 7.8 FRANK COLEMAN, STAFF ACCOUNTANT Synopsis Overtime is one of those “touchy” subjects that public accounting firms are not prone to discuss at length with prospective employees. This case examines the overtime issue in the public accounting profession from […]

CASE 7.5 FRED STERN & COMPANY, INC. (ULTRAMARES) Synopsis The 1930 legal opinion written by Judge Benjamin Cardozo in the Ultramares vs. Touche et al. case would influence, if not shape, the legal liability of public accountants for decades to […]

Case 7.7 ELIZABETH WALLACE, AUDIT SENIOR Synopsis This case focuses on one workday in the life of three auditors, with a particular focus on Elizabeth Wallace, an audit senior for one of the major international accounting firms. Elizabeth is currently […]

CASE 7.9 OLIVIA THOMAS, AUDIT SENIOR Synopsis This case focuses on a sensitive but seldom discussed phenomenon or issue in the public accounting profession, namely, the topic of intra-office dating. In the “old” days when I was in public accounting, […]

CASE 8.1 LONGTOP FINANCIAL TECHNOLOGIES LIMITED Synopsis Longtop, an information technology (IT) company, was founded by two Chinese friends in the late 1990s. The company’s business model was oriented around providing IT services to China’s rapidly growing banking industry. Because […]

CASE 8.5 SHARI’A Synopsis This case examines a unique feature of the accounting and financial reporting function in Islamic countries, namely, Shari’a audits. Islamic businesses are prohibited from engaging in any economic ventures, contracts, or transactions that violate Shari’a, that […]

CASE 8.7 TAE KWANG VINA Synopsis The final few decades of the twentieth century was a challenging time for the public accounting profession. During the 1970s, the Federal Trade Commission forced the profession to eliminate the ethical bans on competitive […]

CASE 8.3 REPUBLIC OF SOMALIA Synopsis Among the most vexing problems facing the United States and other major democracies is the threat posed by terrorists around the globe. In recent years, Somalia has become a major breeding ground for the […]

CASE 8.4 REPUBLIC OF THE SUDAN Synopsis Since the 8th century, the large central African country of Sudan has been a battleground between Christian and Muslim fundamentalists. The country has been ruled since 1989 by Omar Hassan al-Bashir. [Note: as […]

CASE 8.6 MOHAMED SALEM EL-HADAD, INTERNAL AUDITOR Synopsis In 1976, Mohamed Salem El-Hadad completed his four-year undergraduate accounting degree at an Egyptian university. Three years later, after satisfying his compulsory military requirement, El-Hadad entered the accounting profession. El-Hadad immigrated to […]

CASE 8.2 KASET THAI SUGAR COMPANY Synopsis Many public accountants, particularly recent graduates, relish the possibility of an “overseas” assignment. An international assignment may provide an opportunity to see and experience another part of the world, potentially further one’s career, […]