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Ethics Krispy Kreme

In: Business and Management

Submitted By reedjackie527
Words 681
Pages 3
Ethics-Starbucks
Jacqueline A. Reed
November 15, 2014
Brandman University

Ethics-Krispy Kreme
Introduction
The purpose of this case study is to analyze the accounting scandal at Krispy Kreme. "The Krispy Kreme story is one of a newly public company, experiencing rapid growth, that failed to meet its accounting and financial reporting obligations to its shareholders and the public,"(as cited in Maremont & Brooks, 2005). The senior managers were the ones who profited from this accounting scandal and the shareholders and the public suffered as a result. There are several prevention methods that can be taken to prevent this from occurring in the future. It will benefit Krispy Kreme to hire internal auditors who can report to management any regulations.
Analysis
Company Overview Krispy Kreme opened its first store July 13, 1937 in Winston-Salem, NC (Krispy Kreme). According to the Krispy Kreme website, “Vernon Rudolph bought a secret yeast-raised doughnut recipe from a New Orleans French chef, rented a building in what is now historic Old Salem in Winston-Salem, NC, and began selling Krispy Kreme doughnuts to local grocery stores”(Krispy Kreme). Krispy Kreme donuts can be found at many grocery stores with sixty personal stores around the United States. Krispy Kreme offers a fundraiser program for schools and churches. Krispy Kreme has expanded its business internationally “celebrating the 100th shop in Mexico” in 2013 (Krispy Kreme).
Accounting Scandal “Former executives at Krispy Kreme Doughnuts Inc. who oversaw its rise from a regional chain to a highflying sensation used improper, even "egregious," accounting to satisfy Wall Street's hunger for growth, according to a sweeping internal report from the company” (Maremont & Brooks, 2005). The senior managers fixed the filings so that investors would not

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