Suchergebnisse

• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 39: Seibu Railway (Japan, 2004)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …than God: suspected Tsutsumi arrested.” Troubles began in October 2004 when it emerged that Seibu Railway had falsified shareholder information in… …Stock Exchange. The scandal deepened after it was found that from August through October 2004, Kokudo sold some of its shares in Seibu Railway… …without telling buyers that the railway firm’s stock ownership conditions made it subject to delisting. Tsutsumi and other Kokudo executives privately… …Holdings, among others. (Shiseido, e.g., said it had bought the Seibu shares only due to its “long-term business relationship” with Kokudo.) Besides… …lists of shareholders to make it look as if the company was more widely held than it actually was. As Kokudo’s largest shareholder, he hid the extent of… …financial statements to show that Mr. Tsutsumi and Kokudo owned most of Seibu, not just a minority stake. The scandal also took a high human toll: it… …that it deeply regretted the recent developments. “We’ll do our best to become a transparent company which can be trusted,” it said. The company was… …to protect inves- tors with greater transparency. The content of J-SOX is not entirely the same as that of US-SOX, but it is similar to sections 302…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Internal Auditor – Generalist or Specialist

  Dr. Heinrich Schmelter

  …. ___________________ 73 Dr. Heinrich Schmelter has been working in management functions for 30 years (audit, con- trolling and IT), in the automobile industry. 74… …assigned to it. IT audit usually has employees working in it with very good IT knowledge (mainly computer scien- tists), in purchasing/logistics audit… …. business auditor 2. technical auditor 3. IT auditor 4. special investigator 2 Twelve General and Specific Requirements for Internal Auditors The… …audit methodology 3. Internal control and risk management knowledge 4. Internal audit experience 5. Financial knowledge 6. Technology knowledge 7. IT… …decentralised audits, e.g. in a foreign company or factory, it is also expected that every auditor can report adequately to the local top managers (e.g. factory… …agement specialist knowledge, it also relates to company and process knowledge that is as extensive as possible. While an internal audit beginner… …, thereby formulating best practice process improvement recommendations. It is expected from chief auditors and from internal audit managers that, as… …purchasing, logistics or sales, are also initially sub-optimal. 2.12 Specific IT Knowledge As virtually all of the processes in the companies can now only… …be handled with IT support and personal computers are a matter of course as personal tools, an auditor without good IT knowledge is no longer… …. EXCEL, WORD and POWERPOINT). IT knowledge beyond this, also regarding mainframe computer software, is particularly essential for IT auditors, because…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 28: EM.TV (Germany, 2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …. When the company went public in 1997, it still had a tiny EUR 15 million in annual sales. It was one of the first companies to join the “Neuer Markt”… …and Americans wouldn’t have taken the company seriously. And Haffa was one of the most promi- nent examples of entrepreneurs in Germany who struck it… …. But in its chosen niche, cartoons and other children’s programming, it was already much bigger than its competitors. EM.TV controlled about one-third… …world of entertainment. Haffa showed that his prized German programs could make it everywhere else on the Continent. For example, the hit cartoon… …early 2000, shortly after a capital increase, EM.TV started an acquisition spree. For example, in February 2000, it acquired the Jim Henson Company… …forecast.” Haffa added that he would have never expected that it would be possible to be charged in a criminal court. In pleading for their acquittal… …was not executed till autumn. Kirch told the court that he had verbally agreed to the deal in mid-June 2000, and that he considered it to be “a fully… …jail sentence, but they did obtain a crimi- nal fine of EUR 1.2 million for Thomas Haffa and EUR 240,000 for Florian Haffa. It was important for the…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 22: Symbol Technologies (2004)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …in a variety of channel stuffing, known at the company as “three way candy deals”. It paid off smaller resellers to “purchase” Symbol products from a… …crimes (see SEC 2004): – They employed multiple schemes for claiming revenue before it was earned, such as shipping the wrong product when the… …to refrain from scanning new components or returned goods into SAP. Moreover, they arranged transactions with third parties to make it appear that… …Symbol had sold inventory when, in fact, it retained possession of the goods. – Finally, the manipulation of stock option exercise dates had a… …established unrealistic financial performance targets, and he made it clear to executives and employees at all levels that they were expected to do whatever… …it took to achieve those figures. According to the SEC, “there was often a mad scramble at the end of reporting periods to hit the numbers”. Many… …and made a strong commitment “to root out fraud”. It realized that Symbol’s only way to continue as a business was to sever all ties to those engaged… …it agreed to pay a USD 37 million penalty and continue a program to tighten its accounting controls. As part of its settlement of private shareholder…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Efficient Risk Management in Leasing Companies

  Prof. Dr. Fikret Hadžiæ, Amir Softiæ

  …leasing subject (movable or fixed property) and gives it to the lease recipient to use for a certain period of time with the lease recipient being obliged… …to periodically pay the lessee in accordance with the contract. Leasing is a very important source of medium and long-term financing. It is an… …. It is especially conven- ient for small and medium-sized businesses that, quite often, do not have an access to commercial bank loans. Also, leasing… …certain leasing subjects, significantly increases their approval risks and leads leasing companies to an almost identical dilemma, as it does the banks… …conditions”. How- ever, regardless of the adoption of this legal framework, it is evident that the global economy crisis influenced the change in the work… …service to protect assets and achieve a competitive advantage), it is necessary to develop an IT supported appli- cation. We will call this type of… …. It includes data about the cli- ent, transaction, leasing subject and collateral, leasing application status, scoring result, and repayment of leasing… …proval to the maximal amount of rent/lease, and – A developed system of competency holders. These can be individual holders or a collective body. It is… …rulebook on competencies, in which it is unambiguously regulated to whom the competencies have been allocated, under which conditions and up to which… …value. Bearing this fact in mind, which de facto includes International Accounting Stan- dard IAS 39 as well; it is evident how important it is for…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 9: Cendant/CUC (1998)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …revenue and ex- pense recognition policies followed the matching principle. But in retrospect, it became clear that this was not the case. CUC sold club… …solicitation costs to future periods. In other words, it recorded the revenue early and the expenses later. Thus, the company was able to successfully boost… …totally fictitious, including, for exam- ple, USD 500 million over the three-year period from fiscal 1995 to 1997. One fraud investigator commented: “It… …, each quarter, senior management would review the opportunities available for inflating the company’s earnings, and it would determine how many… …who had served under Forbes and Shelton at CUC. On April 15, 1998, the fraud was disclosed to the public: Cendant announced that it had dis- covered… …“accounting irregularities” and that it expected to lower its 1997 earnings. The disclosures sent Cendant stock into a tailspin: the stock price dropped 46% in… …covered it up. The auditors, however, denied the allegations, but agreed to pay USD 335 mil- lion to settle litigation. Ultimately, Cendant sued Walter A… …Corigliano. “It was a culture that had been developing over many years,” Corigliano said in a statement, emphasizing that they had been following orders. “It… …September 2006, it split into four companies. Its real estate and hotel businesses were spun off as stand-alone companies, and a third company, Travelport…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 2: ZZZZ Best Company (1987)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …started his own rug-cleaning business and called it “ZZZZ Best” (pronounced “Zee Best”). Minkow soon learned that carpet-cleaning was a difficult way to… …company and collect insurance money. He stole his grandmother’s jewel- lery and sold it for USD 2,000. When he urgently needed cash in 1984, he forged… …had been committing fraud. When he wasn’t directly stealing money, he was raising it fraudulently. Nonethe- less, he was able to expand his company and… …“carpet-cleaning king of California”, he slacked on his schoolwork, hired more employees and made it on to the local television news. The publicity began to… …you have revenue. When you have revenue, you have income.” As in many of the more recent corporate scandals, it was not the auditors who… …, the auditors scared Minkow by ask- ing him three months later to see the finished project. But Minkow pulled it off again, by re-renting the still… …unfinished building and, astonishingly, completing it in Accounting Fraud in U.S. Companies 32 just 20 days, at a cost of USD 2 million. It was a… …individuals involved in the restora- tion contract.” ZZZZ Best became unravelled almost as rapidly as it rose. In June 1987, just two days before it was… …bankruptcy, though the ZZZZ Best name was so tarnished by then that it is unlikely it would have been able to stay in business in any case. Investors lost a… …counts of racketeering, securities fraud, embezzlement, tax evasion and bank fraud. It also accused Minkow of setting up dummy companies, writing phony…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Performance Measurement and Controlling of Internal Audit – More Than Just a Measurement Problem

  Dr. Andreas Langer, Andreas Herzig, Prof. Dr. Burkhard Pedell

  …internal audit, it is well advised – as well as any other corporate department – to provide evidence that the resources, which it utilises, and the results… …generally quite rightly refer to a significant contribution that it makes to corporate success, because with sufficient resources, it is able to ensure a… …process. Internal audit also inevitably encounters business and controlling decisions, if it intends to contribute to the corporate objectives. It requires… …appropri- ate information for planning and controlling its target contribution, which portrays its own performance and makes it controllable on this basis… …creating added value and improving the business processes. It supports the organisation in the achievement of its targets by assessing the effectiveness of… …ucts also applies to it (cf. Berry/Parasuraman (1999), p. 87). Therefore, custom- ers and functions must also be identified by internal audit, who will… …the same time. With this, a derivation can be made: If it can be proven, with the fulfilment of the objective intended with the quality assessment… …for in- dicators. It is therefore essential for companies and academics to deal more inten- sively with the subject of performance measurement in… …parative partners could be below their performance level) as a sole measuring in- strument, it also raises the difficulty of adequate comparability between… …seqq. and Ziegenfuss (2000), p. 40). When taking a closer look at the indicators mentioned, it is noticeable that the ma- jority of the…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 37: Siemens (Germany, 2006)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …transactions – payments where it was impossible to identify who received them or what services had been provided. Prosecutors in Italy, Liechtenstein and… …the raid, officials in the United States began investigating the case as well, not least because Siemens is listed on the NYSE. Knowing that it… …faced steep fines unless it cooperated, Siemens hired international law firm Debevoise & Plimpton to work with federal investigators and to conduct an… …division. Later in December, Siemens provided its first estimate of the extent of the scandal, saying it could reach EUR 420 million. But analysts pointed… …and the power genera- tion arm (which paid about USD 300 million in bribes). Altogether, it cost Siemens more than USD 2.6 billion to clear its name… …contracts were at the heart of the bribery scheme. In order to understand why Siemens was so susceptible to corruption, it is necessary to go back to the… …internal compliance department knew of the ongoing black money scandal. “It was a system of organized irresponsibility that was implicitly con- doned,” said… …series of industry trends and suffered from a collapse in overall demand. “It was about keeping the business unit alive and not jeopardizing thousands… …of jobs overnight. We all knew what we did was unlawful. But we thought we had to do it. Otherwise, we would ruin the company.” Thus, Siekaczek… …justified his wrongdoing as economic necessity. It is certainly worth delving into his insider’s account (see NYT December 21, 2008): – From 2002 to 2006…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 8: Sunbeam (1998)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …relied on question- able accounting gimmicks and outright fraud to enhance earnings. It happened under the direction of now disgraced CEO Albert J… …write-off as it closed plants and laid off employees, but its re- ported profits soared in 1997, persuading many analysts that Dunlap had turned the company… …investors had bid the stock so high that it did not appear to be a good value, even if the reported profits were accurate (though they did not turn out to… …attractive than it actually was to potential buyers: “This Accounting Fraud in U.S. Companies 64 was a primer in the techniques of financial fraud, in… …, he wanted X dollars in profit, and go get it.” Dunlap had always assured him that the exaggerated profits could be made up, and the falsifica- tions… …tough and powerful CEO is a pattern that frequently crops up in accounting fraud. “It is a fairly common theme to have a personality like ‘Chainsaw Al’… …Dunlap’s corporate carrier in his book “Chainsaw”, made it clear: “Dunlap’s so-called turnaround of Sunbeam in 1997 was little more than a manufactured… …turning underperforming companies around. It is perhaps noteworthy that during his 23-month reign at Sunbeam, Dunlap cut about half of the 12,000…

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