Case 4.6 Phar-Mor, Inc. 6. A) Other high profile cases where a company has committed fraud by misstating inventory include Comptronix Corporation and Bristol-Meyers Squibb Company. B) It is particularly difficult to detect intentional misstatements of inventory because manual checks of inventory only occur semi-annually, management’s ability to alter these checks, and the cheer ability to miscount items due to sheer volume. Phar-Mor was capable of misleading their external auditors because
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Phar-Mor Case 4.6 Questions 1. a) By hiring a member of its external audit team a company could gain insight into the auditor’s process and better devise methods of hiding fraud. b) Hiring a former auditor would greatly compromise and possibly impair the existing external auditor’s ability to remain independent. On top of having knowledge about the auditor’s practice, preexisting relationships could cause bias in the audit outcome. c) Sarbanes-Oxley Act 2002 limits the ability of corporations
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Phar-Mor Inc., a deep discount drugstore chain, was founded in 1982 by Michael J. “Mickey” Monus, who was a vice-president of Tamco Distributors Co. By 1992, Phar-Mor have 310 outlets and 20,000 employees in 34 states. Phar-Mor went into bankruptcy in 1992 due to fraudulent activities, which had caused its investors over $500 million dollars. The Sarbanes-Oxley Act of 2002 (SOX) could have prevented the bankruptcy if it had been in effect and was able to be applied to Phar-Mor Inc. The fraudulent
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Fraud Case on Phar-Mor, Inc. Introduction Phar-Mor, Inc. was one of the top ten deep discount store that grew rapidly in a short period of time during the 1980s. Phar-Mor pricing strategy was to sell products at an even greater discount than other deep discount stores like Wal-Mart. While the practice of selling at such low cost attract customers, Phar-Mor was experiencing losses. The prices were cut so low that profit would not be generated. And this was how the fraud began. To prevent the truth
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Individual Reflection Essay-How the ISLLC standards pertain to leadership behavior at my site. Jeanette Noriega Grand Canyon University, ED 534 February 25, 2014 Individual Reflection Essay-How the ISLLC standards pertain to leadership behavior at my site. Three major challenges facing the leadership at my cite and the ISLLC standards they reflect and the proposed possible solutions based on the standards. 1. Appropriate staffing numbers. One major challenge we are facing at my cite is
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kaek (Indonesian origin). Though Thailand was never colonized by colonial powers, pop music and other forms of modern Asian, European and American music have become extremely influential. The two most popular styles of traditional Thai music are luk thung and mor lam; the latter in particular has close affinities with the Music of Laos. Classical music Thai classical music is synonymous with those stylized court ensembles and repertoires that emerged in its present form within the royal centers of Central
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rely on what you find in those samples to determine accuracy of the remaining records. Phar-Mor was able to fool their accountants, Coopers and Lybrand, for several years about their inventory because they lacked integrity. The company’s MIS was inadequate and when asked about bettering it, senior officials shot the idea down because they wanted the fraud to go undetected. The internal controls were poor and Phar-Mor employees were able to bypass areas that should have had controls on them. The management
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to Auditing Standards, your textbook, and other relevant authoritative sources is expected where appropriate. Even where some of the questions are quite general, try as much as possible to relate your answer to the case. 1. Some of the members of Phar-Mor's financial management team were former auditors for Coopers & Lybrand. (a) Why would a company want to hire a member of its external audit team? (3pts) (b) If the client has hired former auditors, would this affect the independence of the
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to Auditing Standards, your textbook, and other relevant authoritative sources is expected where appropriate. Even where some of the questions are quite general, try as much as possible to relate your answer to the case. 1. Some of the members of Phar-Mor's financial management team were former auditors for Coopers & Lybrand. (a) Why would a company want to hire a member of its external audit team? (3pts) (b) If the client has hired former auditors, would this affect the independence of the
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FAKTA UTAMA • Phar - Mor telah berkembang dari 1 toko di 1982-310 toko pada tahun 1992, dengan penjualan melebihi $ 3 miliar. • Diskon besarbesaranpadausahatoko obat ritel yang sangat kompetitif . • Mickey Monus dinyatakan bersalah pada bulan Desember 1995 menggelapkan lebih dari $ 10 juta dan dihukum hampir 20 tahun penjara . • Hampir $ 1.140.000.000 diinvestasikan dalam perusahaan swasta yang dikuasai oleh Westinghouse Credit Corp , Sears Roebuck & Co , Edward J. de Bartolo , dan Lazard Freres
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