Posts Tagged: Internal Controls

Where are the Controls?: Corporate Ethical Breaches Identified by Auditors

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According to a 2011 internal audit, executives at the British drug maker GlaxoSmithKline were warned about critical problems with the way the company conducted research at its drug development center in China. Potential financial risk and regulatory action are likely due to the sales practices that are currently at the center of a bribery and… Read more »

The Tragedy of “Fast Fashion”

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A garment factory, manufacturing products for international clothing companies, collapsed outside of Dhaka, Bangladesh, last month. The collapse killed more than 400 workers and injured many others. This tragedy came on the heels of a factory fire in November 2012, which killed 112 workers. Questions: 1. Who are some of the chains that supply “cheap… Read more »

JPMorgan Chase: Transition from Model Citizen to Problem Child in the Eyes of the Government

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According to The New York Times, government investigators have found that JPMorgan Chase devised “manipulative schemes” that transformed “money-losing power plants into powerful profit centers.” In addition, they allege that one of its most senior executives gave “false and misleading statements” under oath. Questions: 1. Who is Jamie Dimon; who is Blythe Masters? 2. At… Read more »

Be Afraid, Be Very Afraid

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Even though Dodd-Frank legislation is suppose to keep our financial system safe from another crisis like the one that happened in 2008, a newly released Senate report disproves this. Questions: 1. According to the report detailing the trading fiasco, what are some of the signs that this could happen again? 2. What was the trend… Read more »

Could Additional Internal Controls Have Prevented this Heist?

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It was March 18, 1990, when a pair of thieves disguised as Boston policemen, entered the Isabella Stewart Gardner Museum and stole 13 masterpiece valued at $500 million. Twenty-three years later the FBI says that they know who did it. They are releasing a few details and offering a $5 million reward for information leading… Read more »

Money Melting a Hole in Your Pocket?

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Canada started rolling out new, polymer-based $100 bills two years ago, followed by 50s and then, last November, 20s. The money, which isslick like a sheet of plastic, hard to fold and partly transparent, is more difficult to counterfeit than Canada’s old paper-and-cotton bills. Australia and New Zealand have used similar, plasticized notes for years…. Read more »

Justice for Dixon Illinois?

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In November 2012, Rita Crundwell, comptroller of Dixon, Illinois, pleaded guilty to wire fraud and admitted that she stole approximately $53 million, admitting she stole the money from the city of Dixon while she was comptroller. She still faces 60 separate but related state felony charges for theft in Lee County. She has pleaded not… Read more »

Martha Stewart- Wildcard, Visionary, but Not a CEO

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There are very few corporate leaders whose interests are more closely aligned with their shareholders’ than the homemaking icon, Martha Stewart. She owns 26 million shares and controls nearly 90 percent of the voting rights of her company Martha Stewart Living Omnimedia. While the company lost $50.7 million dollars in the most recent quarter, this… Read more »

Hyundai & Kia overstated mileage

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Hyundai Motors America and Kia Motors America are being forced to lower the fuel economy estimates on the majority of their 2012-13 models after an investigation by the Environmental Protection Agency found that the companies overstated the fuel efficiency numbers for their vehicles in previous years. Based on the audit, they will also have to… Read more »

Long Island Stock Broker Creates Complex Web of Deceit

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Stockbroker, Mark Hotton, defrauded the producers of a Broadway production of “Rebecca,” through the combination of a fictitious loan and phantom investors, conjured up as part of a sham plan to rescue the financially ailing show. Questions: 1. How was the complex fraud described by federal authorities? 2. How could the producers have been proactive… Read more »