The Enron scandal resulted in other new compliance measures. Additionally, the Financial Accounting Standards Board (FASB) substantially raised its levels of ethical conduct. Moreover, company 's boards of directors became more independent, monitoring the audit companies and quickly replacing bad managers. These new measures are important mechanisms to spot and close the loopholes that companies have used, as a way to avoid
The other reason for erosion can be that the accounting and auditing profession in particular needs to regain trust. People of America from last two decades have witnessed high profile scandals and in which the accountants and auditors have failed in their fiduciary responsibilities. The removal of self regulation in the auditing profession can serve as a wakeup call to all the leaders and professionals of all types.
In 1958, Alex Grass incorporated Rack Rite Distributors, Inc. Grass opened Rite Aid’s first store, through Rack Rite, in 1962, as a Thrift D Discount Center, in Scranton, Pennsylvania. 1963, Thrift D Discount Center became a drugstore chain when they opened five more stores. In 1965, the Thrift D Discount Center expanded to five northeastern states by quickly acquiring and opening new stores. In 1966, the first Rite Aid store opened in New Rochelle, New York. 1976, they introduced seventy Rite Aid private label products. The next year, 1968, they changed their name, officially, to Rite Aid Corporation and started trading on the American Stock Exchange. Then, two years later, in the beginning of the 1970’s, they moved to the New York Stock Exchange. Again, two years later, 1972, they had been operating 267 stores in 10 states. 1981, nine years later, they became the third-largest retail drugstore chain in the country. In 1983, they made over $1 billion in sales. In 1987, their twenty-fifth anniversary was celebrated and they, by then, had 420 stores in 9 states and Washington D.C., as well as Pennsylvania, where they started their business as a Thrift D Discount Center, in Scranton. Their market had greatly expanded and they had passed the 2,000-store mark to become the nation’s largest drug store chain in terms of store count. Eight years later, in 1995, they acquired Perry Drug Stores, the biggest chain of drugstores in Michigan. It was their largest acquisition to date. By then they had operated nearly 3,000 stores. That same year, Martin Grass succeeded his father Alex Grass, as Chairman and CEO of Rite Aid. The year after that, they had grown out to the West Coast and the Gulf Coast, adding more than ...
Standing for consumer value stores, CVS has now become the largest healthcare provider with more than 9,600 stores throughout forty-nine states, Brazil, the District of Columbia and Puerto Rico. Within the past ten years, their acquisitions with Omnicare, Eckerd Stores, MinuteClinic, and Target have led to the growth
Founded by Sam Walton in 1962 as a discount city store in Bentonville, Wal-mart was incorporated as Wal-Mart Stores Inc. on October 31, 1969 as an American public corporation that runs a chain of large, discount department stores. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales.Wal-Mart further expands outside America and operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly-owned operations in Argentina, Brazil, Canada, Puerto Rico, and the UK.Presently listed on NYSE, Wal-Mart began trading stock as a publicly-held company on October 1, 1972. According to the 2007 Fortune Global 500, Wal-Mart is the world's largest public corporation by revenue and the largest private employer in the world and the fourth largest utility or commercial employer, trailing the Chinese army, the British National Health Service, and the Indian Railways.Wal-Mart reached a sales milestone in 1979 with 276 stores and 21,000 employees, it reached $1 billion in sales. Having only been in existence for 17 years, the company achieves the quickest ever ascent to the $1 billion milestone.Through out the 1980s, Wal-Mart grows rapidly and by its 25th anniversary in 1987 there were 1,198 stores with sales of $15.9 billion and 200,000 associates. The year 1987 in particular is marked by the completion of the company's satellite network, a $24 million investment linking all operating units of the company with its Bentonville office via two-way voice and data transmission and one-way video communication. In 1988, the founder Sam Walton stepped down as CEO and was replaced by David Glass though he remained as Chairman of the Board of Directors. The y...
Wal-Mart first opened in Rogers, Arkansas on July 2, 1962. Wal-Mart was built on the principle of “The Lowest Prices Anytime, Anywhere”. What started out as a simple discount store became the largest retailer in the world with 11,000 stores worldwide with a net sales of $482.2 billion. Wal-Mart works to bring value to its customers and to create opportunities for everyone. My preceptor was Dr. Lorrie Williams and she was one of three pharmacists in charge of the Wal-Mart pharmacy that I interned at for my Introductory Pharmacy Practice Experience. She had many roles within the pharmacy. Her primary roles were to check the prescriptions before being filled to ensure that it is the correct drug being dispensed and to ensure there is no tampering
Walgreen Co. engages in the retail sale of prescription and nonprescription drugs, and general merchandise, through a drugstore chain in the United States. It is the nation’s largest drugstore chain by sales. General merchandise includes cosmetics, toiletries, household items, food, beverages, and photofinishing. It also provides services at the drugstore counter, as well as through the mail, by telephone, and on the Internet. As of October 31, 2005, the company operated 5,000 stores in 45 states and Puerto Rico. In addition, it operated 3 mail service facilities. Walgreen Co. was founded by Charles R. Walgreen, Sr. in 1901. The company is based in Deerfield, Illinois.
The acquisition of Elgee Drugstores which was operating a chain of five stores by Superdrug in 1972 created a rapid growth expansion of the chain up to 40 stores around early 1970s. In 1973, a computerized system for stock control came into use. Over the next decade, the chain expansion reached as many as 143 outlets with the opening of the first store in Wrexham, Wales in 1980 as well as the opening of the current head office complex in Croydon took place. Also with the record sales following on, the continuing success of the Goldstein brothers’ business methods gave rise to the extension of head office and expansion of stores and the increasing profits arising out of own-label brands. Moreover, semi-automated distribution centre was completed ...
The major groups that were directly affected are investors, employees, and suppliers. Here we should make the distinction between different types of investors. There are two major types of investors: insiders and outside investors. Insiders are the investors who know the information that is not known publicly and may benefit them in some way. Outside investors are the investors who only know publicly known information. In our case, outside investors was the group that lost the most. On the other hand, insiders, notably Mickey Monus and David Shapiro, were the one that gains millions on IPO. The group who suffered was employees of Phar-Mor. After the scandal was revealed, most of the stores were closed to cover up losses. As a result, thousands of employees got fired. Another party that was damaged by the scandal was Coopers&Lybrant, the firm that did the audit for Phar-Mor, lost its reputation as a firm who does an audit with integrity. The secondary effect of the scandal was the overall mistrust among investors. They thought that if a giant retailer can forge its accounting books, why smaller companies wouldn’t do the same. As a result, investors became reluctant in investing into businesses that caused harm to the economy as a whole. The last but not least group that was affected by the scandal is Phar-Mor’s suppliers. Mickey Monus was fiercely fighting with them to make the chipset deals to cover up his losses, sometimes using inappropriate pressure and causing suppliers making unprofitable deals. In additions, Monus forced them to pay fees and sponsor his basketball League using buyer power of his company. In addition, a lot of bills for supplies were unpaid for months by Phar-Mor. Some suppliers said that they hated doing business with Phar-Mor, but had no choice since it had an access to vast amount of customers.
One of the foremost problems facing the accounting profession today is the loss of respect that faces accountants in light of recent accounting scandals. In order to regain lost respect in the accounting profession an accountant must have integrity and ethics that are above and beyond the norm. This fact is true whether the accountant works for a business entity or for a government entity. In either situation the accountant is responsible for remaining steadfast, not only in professional behavior, but in personal behavior as well. In recent years, accountants have come under fire by the general public for unethical decisions, a reputation that, although only a few individual accountants were guilty, the entire profession was found guilty of, in the court of public opinion. Now, the accounting profession must be far more diligent in governing themselves, and in assuring those dependent upon their decisions, that they are above reproach. This is especially true of those accountants responsible for government funds, which can be scrutinized by the public. The public seem to have set more rigorous standards than business investors, of what is proper use of the funds available. They will not tolerate waste or misappropriation of funds and demand complete accountability. Accountants must stand ready, willing, and able to answer any and all questions that may be put forth, and be able to prove that the decisions that have been made were correct and proper. This includes not only following the letter of the law, but avoiding any decisions that, while being legal, would not be totally ethical and above board. An accountant is trusted with confidential information which must remain confidential, unless it has led or could possibly lead to illegal activity, in which case, of course, the information, must be reported immediately to the proper authority.
Aramark was born because of two business owners who merged their two companies, Davre Davidson and Bill Fishman. These two men were the owners of two peanut vending businesses. In 1959, after merging, they incorporated their new company with the name Automatic Retailers of America, Inc. (ARA). In the first year of operation, they company earned $24 million. For the next 10 years, ARA grew at a rapid pace, obtaining 150 smaller vending companies ("History of Aramark Corporation – FundingUniverse").
This deep discount drugstore chain started with one store in 1982, but because of its major success, within seven months, the second store was opened. Within a year there were eight Phar-Mor stores. In 1988, the chain featured 100 stores. Monus was named one of the nation’s leading entrepreneurs in News Weekly. In 1990 Phar-Mor surpassed the 200-store mark. By 1992, the company opened up 310 stores with sales of $3 billion. Phar-Mor Inc. was named one of the top ten deep discount drug store chains in the United States. (“Phar-Mor History”) As the company grew, its product mix expanded from prescription and over-the-counter drugs, health and beauty aids to include more general merchandise, including office equipment, sporting apparel, videos, music, and frozen foods.
Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
"This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.
It is one of the largest hypermarket chains in the world, the second largest retail group in the world in terms of revenue, and the third in profit.