He had far too much control and was able to perform his duties without any internal controls to limit his ability to affect the financial statements.
Phar-Mor emerged from bankruptcy protection in January with stores remaining,  only to be hit hard once again by competition from other large retailers, such as Wal-Mart and Targetwhich began opening new stores with pharmacies.
He would then misstate the actual price Phar mor fraud essay inventory by increasing the cost and use the difference, plus the extra money given by suppliers, to pay expenses. Hire Writer Appendix A. A jury decided in that the accountants committed common law and federal securities law fraud by falsely representing they had performed GAAS audits when in fact they had failed to do so.
When employees make rationalizations related to committing fraud, an auditor will have a hard time detecting the fraud because the employee will do everything in their power not to get caught. Based on deceptive data and inventoryPhar-Mor borrowed millions, ostensibly to finance its unusually rapid growth.
Minutes are legal documents that are used as a proof for referring back to in the future. This was a strong incentive to allow the fraud to continue. In the case with Phar-Mor, management not only felt pressure from an upcoming IPO which will be analyzed in the subsequent paragraphbut also from vendors who sold products at Phar-Mor.
Many products were shipped via direct store delivery, but some were shipped through Tamco warehouses, which Phar-Mor later purchased. Personal financial obligations of those involved in the fraud allowed for them to justify the misappropriation of assets.
However, the documentary was able to shed light on the many different rationalizations made by those involved with the fraud at Phar-Mor.
How to cite this page Choose cite format: The formula is still It is incumbent upon an auditor to determine whether individuals in management positions have crossed that line in order to fully assess the fraud risk associated with a company.
The organizational structure of Phar-Mor was ineffective and lacked many control activities including: Most importantly, he never wanted to correct the overridden controls, digging the fraud hole bigger and bigger every year.
As a result, Phar-Mor had to file for bankruptcy protection, closed 55 stores and laid off 5, employees. Phar-Mor was a large grocery story and had thousands of inventory items on hand at each store which processed significant amounts of cash each day. He bullied suppliers into giving him a certain amount of product for a lower price per unit, as well as large sums of money in order not to sell a certain competitors products.
Some of its stores used the names Pharmhouse and Rx Place purchased in the mids from the F. Once they started following orders from the president, they were under increased pressure to continue covering up the fraud or risk being harmed, financially or physically.
What happened in the past with Coca-Cola? Most associated with the fraud never meant to start it, but they never did anything to stop it until they were about to get caught.
The minutes should contain the The sentence was appealed and later reduced to nine years.Phar-Mor Fraud Essay “How to Steal $ Million” Phar-Mor Fraud The story of Phar-Mor is a tale of fraud, one of the largest in American corporate history, but it's also a modern morality play in which previously honest people, hired more or less at.
Finn’s willingness to go along with the actions of Monus made an already bad situation worse. Finn as the CFO should not have allowed himself to be involved in financial frauds of any sort just to show a profit.
Phar-Mor Fraud Essay Words | 8 Pages. Phar-Mor, Inc was a thriving discount grocery store in the late ’s. Phar-Mor was moving product quickly but profit margins were not. Phar-Mor (stylized as PHA℞-MOR) was a United States chain of discount drug stores, based in Youngstown, Ohio, and founded by Michael "Mickey" Monus and David Shapira in Some of its stores used the names Pharmhouse and Rx Place (purchased Industry: Retail.
Phar-Mor was known as one of the major discount chain retailers in the late ’s - early ’s. It was founded by Mickey Monus, a gambler in nature, who with the help of senior management was “cooking the books” for years to cover up his loses. Case Phar Mor Essay Sample. I feel that one major flaw in the Phar-Mor company is the fact that Mickey Monus has full control of the company and could pull off such a giant fraud scam.Download