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Tyco Corporation

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Running head: TYCO CORPORATION 1
Tyco Corporation
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TYCO CORPORATION 2
Tyco Corporation
The management style in a company is an important indicator of possible unethical and
fraud issues in the company. Generally, every company should have adequate checks and
balances and internal controls to ensure that there are no cases. Whereas it is the duty of the
management to establish these structures, the company’s auditors have the duty of identifying if
they have established adequate controls to prevent crime and whether these measures are
working as required. In Tyco’s Corporation, various red flags would have indicated possible
cases of fraud such as handpicking of top management, unwarranted termination of employees,
and a high audit fee.
The company allowed Kozlowski to pick individuals he preferred to work with at the top
management. The lack of using established structures to determine the individuals that made
managerial decisions for the company was an indication of a lack of checks and balances in the
company. In fact, the handpicking of top management implied that the people required to
establish checks and balances in the company could not establish measures that would harm
those that had appointed them. Kozlowski handpicked Mark Swartz, Mark Belnick, Rifkind,
Garrison, and Wharton (Boostrom, 2011). This practice enabled him to compromise the
company’s corporate governance and to aid in his fraudulent dealings.
Kozlowski termination of employees without following due process was also an issue
that would have raised red flags. For example, the company inappropriately discharged Jeanne
Terrile because she questioned the manner in which the company was making mergers and
acquisitions (Boostrom, 2011). The victimization of employees who challenged the
management’s ideology was a red flag that the auditors would have observed since this issue is
not sufficient to warrant for termination.

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Running head: TYCO CORPORATION 1 Tyco Corporation Student’s Name Institution Affiliation TYCO CORPORATION 2 Tyco Corporation The management style in a company is an important indicator of possible unethical and fraud issues in the company. Generally, every company should have adequate checks and balances and internal controls to ensure that there are no cases. Whereas it is the duty of the management to establish these structures, the company’s auditors have the duty of identifying if they have established adequate controls to prevent crime and whether these measures are working as required. In Tyco’s Corporation, various red flags would have indicated possible cases of fraud such as handpicking of top management, unwarranted termination of employees, and a high audit fee. The company allowed Kozlowski to pick individuals he preferred to work with at the top management. The lack of using established structures to determine the individuals that made managerial decisions for the company was an indication of a lack of checks and balances in the company. In fact, the handpicking of top management implied that the people required to establish checks and balances in the compa ...
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