Richard Scrushy Case Study

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Tracing back the history of accounting scandals, major corporate scandals not only hurt the economy but also crush investor confidence on investing in company. Majority of corporate scandal are create by greedy CEOs “cooking the books” to meet the number that they expected. In this case, Richard Scrushy is one of the greedy CEOs. This is a case of a falling American dream. Richard Scrushy, was a self-made son of the new South, a former teenage parent who hauled himself up from a menial job to become an emperor of the new economy. Health South Corporation is the United States’ largest inpatient rehabilitative hospital. Health South provide the service of rehabilitative care to patient recovering from all kind of conditions. It all started in 1984, the company is used to known as Amcare Inc. at the decade of 1990, Health South Corporation expanded in tremendous speed. At the year of 2003, Health South has expended to two thousand facilities in not only every state in United States but also United Kingdom, Canada, Australia, Puerto Rico, and Saudi Arabia. The company has recorded almost four and half billion U.S dollars in revenue, which dominated the entire rehabilitation care industry. Health South Corporation seems like a dream. Unfortunately, Health South Corporation’s accounting issue started to surface in the end of 2002. Richard Scrushy sold seventy- five million worth of stock a few days before the corporation announced a huge loss to the public. Since that event, the U.S. Securities and Exchange Commission started to investigate whether Richard Scrushy was involved in insider trading. March 20, 2003, Richard Scrushy, the former chief executive officer of HeathSouth Corporation, was charged by the Securities and Exchang... ... middle of paper ... ... you are involved in cheating, your tolerance of unethical behavior will increase. Ethical is one the fundamental virtue for all business student. If business students are not well train for maintaining ethical judgment, the scandals they might create will damage investors’ confidence on investing corporation, which damage nation’s economy as a whole(Works Cited). In conclusion, all officers who are responsible for the Health South Corporation scandal is convicted and pay their penalty. Although Scrushy was not convicted the first trail, but the prosecutor tried their best and successfully bring justice on the Health South scandal. Ethical is one the fundamental virtue for all business student. All business student should be well train to maintain ethical judgment and prepare to have the courage to deny all kind of unethical situations and scandals(Works Cited).

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