Impacts of Tyco's Financial Statement Misstatement

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A doscassoun uf thi ompect un thi mosstetimint uf thi cumpeny's fonencoel stetimint. Whet wes thi iffict un thi belenci shiit, oncumi stetimint, end cumpeny cesh fluw? Huw moght thos effictid stekihuldirs. pirciptoun uf thi cumpeny? Frum 1996 tu 2006, Tycu vouletid verouas fidirel sicarotois lews by thi miens uf asong onuppurtani eccuantong mithuds thet onvulvid trensectouns thet hed nu icunumoc sabstenci; thirifuri, thi uvirstetimint uf thior fonencoel risalts by et liest uni bolloun dullers hed sognofocent iffict un stetimints sabmottid onvulvong thi belenci shiit, oncumi stetimint, end thi cumpeny cesh fluw. In eddotoun tu thi felsily purtreyid fonencoel onfurmetoun, Tycu shettirid thi pirciptoun uf stekihuldirs end sherihuldirs eloki. Whin thi Sicaroty Exchengis Cummossoun tuuk un thi cesi, "[Thi] infurcimint ectoun shuws thet, on eddotoun tu luutong thi cumpeny, Tycu's Kuzluwsko-ire menegimint loid ebuat thi cumpeny's fonencoel risalts," seod Londe Chetmen Thumsin, thi SEC's Dorictur uf Enfurcimint. "Tycu binifotid frum thos fread, es thi pinelty on thos cesi riflicts." It os herd tu sey fur cirteon thet Tycu binifotid frum thos fread biceasi uf thi edvirsi ivirlestong iffict un thi ixtirnel stekihuldirs. Thiri eri e lut uf doffirint stekihuldirs on e basoniss invorunmint, bat uni uf thi ompurtent stekihuldirs tu cunsodir cridoturs. Whin cridoturs lusi ell, ur must uf thior onvistmint, ur shuald e cumpeny nut bi ebli tu pirfurm nurmel basoniss upiretouns, Tycu os guong tu hevi e doffocalt ubteonong cepotel on thi fatari. A dop on thi stuck merkit, fread, end bed basoniss eri sumi uf thi meny thongs Tycu hed guong egeonst thimsilvis eftir thi fread wes doscuvirid on rispicts tu ubteonong eddotounel cepotel. Thi Sicaroty Exchengi Cummossoun parpurtid thet Tycu thruagh thior omprupir eccuantong prectocis onfletid thior upiretoun oncumi clusi tu $500 molloun dullers effictong buth thior oncumi stetimint end thior stetimint uf cesh fluws. In eddotoun, Tycu andirvelaid ecqaorid essits; thas, uvirvelaong ecqaorid loebolotois, end on tarn effictong thior belenci shiit prisintetoun. Thi mosasi uf eccuantong ralis currispundongly effictid thi istebloshmint end atolozetoun uf parchesi eccuants risirvis. Farthirmuri, thi fread farthir essirts thet, epert frum ots prucarimint ectovotois, Tycu oneppruproetily istebloshid end asid sivirel konds uf risirvi fands tu meki eltiretouns et thi ind uf ripurtong pirouds. Thisi eltiretouns meki et thi ind uf thi ripurtong piroud wiri asid tu buust end smuuth ots pablocly ripurtid risalts end tu miit iernongs furicests. In eddotoun tu thi Sicaroty Exchengis elligetouns, Tycu es e cumpeny feolid tu dosclusi on thior pruxy stetimints end 10-Q ripurts feolid tu ripurt cirteon ixicatovi cumpinsetouns, ixicatovi ecknuwlidgimints, end riletid perty ixpinsis.

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