ACCOUNTING
Social framework final.docx

Social framework final.docx - ACC-692-Q3012 Intvw...

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ACC-692-Q3012 Intvw Tech/Legal Aspects Frd 18TW3 HealthSouth: A Case Study in Corporate Fraud 2-2 Final Project Part I Milestone One: Social and Legal Frameworks Submitted by: Anain Romero
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Social framework: HealthSouth Asia is company that deals in health care in Alabama. It was established in mid of 1980s. At that time the healthcare industry was at peak and was very profitable this advantage was taken by heath south company. In the near future in the 1990s they saw maximized growth and had a great growth pressure as well. Then in the start of 2000s the company faced and accounting scandal that was due to high earnings of the company. The company was said to be reporting false financial information to cover their earnings that was being overstated by around $3.8 to $5.6 billion. It was done due to increase the market value and to attract the investors to invest in the company that can help increase the capital of the company. Executives of the HealthSouth were the guilty in the fraudulent act. The frau was in the form of quarterly reports they view the quarterly report before the used to publish it for the public. They altered the results and smooth them so that to show the company’s goodwill to be good in the market. This overstating of the results was caught in 2002. This overstating of results was being imposed by the higher management to carry out the fraudulent reports entries that were not backed up. Additionally the management had the knowing of auditors that they don’t check the small transactions. In order to avoid the detection of the fraud in the audit they would decrease their fixed assts. This was an effort to defraud the stockholders and public. They used the code words for those meetings to be “family meetings” (Axis). Without any details published
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  • Spring '16
  • Dr. Germaine F. Brewington

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