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What are the roles of external audit in corporate governance
Importance of internal auditing
Importance of internal auditing
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The Investors and related parties lost many millions, the employees lost their savings and their jobs, and the most important thing was the accounting profession integrity was at risk. So this creates many aspects must be changed. Need the changing to reinstate the public confidence in the accounting profession and to find ways to keep away from fraud in the long term. was one of the largest super discount drugstores who competed with companies like Wal-Mart in the early 1980’s up until its demise in 2002. The company was a complete success with over 300 discount super stores across the United States and employing thousands of workers. This came at a price as the company was found to have engaged in some unlawful business practices that soon came crashing down as the scheme perpetrated by Michael Monus and other former Coopers & Lybrand employees would use their knowledge of the industry to deceive the public.
From its inception Phar-Mor Inc. became one of the five largest retail drug store chains in the U.S. The company grew in just seven years with over 300 stores and 25,000 employees nationwide.
Its low cost strategy proved to be the key to its success; as company sales reached $3 billion in FY 1991. The success of Phar-Mor Inc. came to an abrupt halt in 1992 as Michael Monus, the companies president was fired that year and
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scandal the court found auditor Coopers & Lybrand failed to show there audit was in compliance with Generally Accepted Auditing Standards. The fraud continued for a period of six years and the attorneys claimed that had the auditor been more diligent they would have been able to uncover the actions of its audit client Phar-Mor Inc. The attorney claimed the internal auditors did not provide sufficient documentation to the external auditor, Coopers & Lybrand, and failed to acquire pertinent information regarding highly material transactions during the course of its audit
... Thus, the firm’s pricing policy should be flexible enough not to discourage the price-sensitive consumers and yet allow the company to sustain ever increasing product and service development costs. Also, mergers and acquisitions could be used by the company to its advantage. That would follow in the footsteps of the CVS recent acquisition of Arbor Drug and Revco and comparable transactions performed by the CVS competitors such as Rite Aid acquiring Marco, Thrifty Payless, and K&B. M&A practices make sense as they reduce competition, increase the customer base, and provide convenient locations for the existing customers.
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 ...
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.
We strive to be the number one provider in the United States by investing not only in our company and technological advancements, but also in the communities in which we serve. Whether our customers are new to this world or our veterans, we know that our company can provide them with the newest and most effective products and services, while promoting the healthy communities in which they live. Through our valued employees, CVS is able to provide quality services and quality products. Retail Pharmacy Growth Strategy: CVS has managed to grow considerably in the past few years with the help of acquisition of beneficial companies and integrated the operations of these companies by creating synergy to drive higher margin and greater economies of scope. CVS is building more and more pharmacy stores in convenient locations.
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
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").
Take into consideration the auditors from Arthur Andersen. They did not take into consideration the greatest good for the greatest number of people. The auditors from Arthur Andersen took into consideration the consequences only for their own firm and their own well-being. Vinson & Elkins lawyers should not have destroyed evidence in order to protect their client Enron. Lawyers do take an oath to help protect and defend their client but they are not to help find ways for their client to violate the
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...
The law requires auditors to report any fraudulent activities discovered during the course of an audit to the SEC. This is when Article I of Section 51 of the AICPA Code of Professional Conduct comes into play. The auditor may uncover illegal acts or fraud while auditing the financial statements of a company. In such instances, the auditor must determine his or her responsibilities in making the right judgment and report their discovery or suspicions of the said fraudulent activities. Tyco International is an example of the auditors’ failure to uphold their responsibilities. Tyco’s former CEO Dennis Kozlowski and ex-CFO Mark Swartz sold stocks without investors’ approval and misrepresented the company’s financial position to investors to increase its stock prices (Crawford, 2005). The auditors (PricewaterhouseCoopers) helped cover the executives’ acts by not revealing their findings to the authorities as it is believed they must have known about the fraud taking place. Another example would be the Olympus scandal. The Japanese company, which manufactures cameras and medical equipment, used venture capital funds to cover up their losses (Aubin & Uranaka, 2011). Allegedly, thei...
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 ...
Unethical accounting practices involving Enron date back to 1987. Enron’s use of creative accounting involved moving profits from one period to another to manipulate earnings. Anderson, Enron’s auditor, investigated and reported these unusual transactions to Enron’s audit committee, but failed to discuss the illegality of the acts (Girioux, 2008). Enron decided the act was immaterial and Anderson went along with their decision. At this point, the auditor’s should have reevaluated their risk assessment of Enron’s internal controls in light of how this matter was handled and the risks Enron was willing to take The history of unethical accounting practic...
|1959: |Rudolf Dassler's wife and two sons become part owners of the Puma Sportschuhfabriken Rudolf Dassler KG. |
This shows how a lack of transparency in reporting of financial statements leads to the destruction of a company. This all happened under the watchful eye of an auditor, Arthur Andersen. After this scandal, the Sarbanes-Oxley Act was changed to keep into account the role of the auditors and how they can help in preventing such
Accounting dates back as far as first centuries, is the language of business. As everything has gone through many changes, accounting has also changed many times through out the centuries. It went from the use of abacus to the most advanced softwares, and computers. With these drastic improvements nowadays accounting, financial accounting and management are facing big challenges. From the presentation of the reports to communication to the users, investors, and owners, the accounting field has gained totally a new shape from two decades ago. Today with the dynamic change in every aspect of life, the accounting field has to act fast and be able to adapt these new changes and challenges in order to survive.
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.