Litigation, Censures, and Fines

Litigation, Censures, and Fines Essay example
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Finance & Accounting
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Litigation, Censures and Fines Name Institution affiliation Tutor Date Litigation, Censures and Fines The growth of the corporate world is accompanied with responsibilities that are aimed at maintaining the legality at which organizations handle their practices…

Introduction

In an argument by Mills (2003), ethical responsibilities in accounting cannot be assured without the implementation of litigations, censures and fines. This ensures that organizations and auditors are responsible when handling the accounts of the organization. Conan, Chad & Mark (2011) also point out that minus litigations, censures and fines investors and creditors would be exposed to greater risks involved in fraud cases created by management teams and auditors. This paper will analyze the possible causes at which legislations, fines and censures can be imposed on an organization. The analysis will be done by reviewing the case of Phar-Mor case of 1992. In 1992, the United States saw the closure of one of the most promising retail outlets in the country. Phar-Mor was cited to be the next Wal-Mart as it recorded great numbers in its sales. In an argument by Conan, Chad & Mark (2011) Phar-Mor had a great future in the United States market if only its accounts recordings were legit. The organization had contracted Coopers & Lybrand as their auditors. In the Phar-Mor case the top management team confessed to financial statement fraud after creditors and investors in the organization filled cases challenging the legibility of their financial statements after a massive loss was recorded. ...
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