ACCT 525 Week 1 Homework Assignment; The Sarbanes-Oxley Act Studies Cases

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ACCT 525 Week 1 Homework Assignment; The Sarbanes-Oxley Act Studies Cases
​(1) The case of Phar-Mor Inc.
(2) Waste Management Case 1990
(3) Enron Scandal early 2000’s

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Acct 525 Current issues in AccountingHomework Week 1The Sarbanes-Oxley Act Studies Cases1) The case of Phar-Mor Inc.The Phase-Mor Inc.; is a discount drugstore founded in 1982 which is a related companyto Giant Eagle, a family owned grocery chain and a distribution company calledTamco Distributors Co. Its business consists in buying the largest possible amount ofinventory to get the best price and then sell these products in the stores with 25%-40%off the retail prices.The president of this company was Michael J. Mickey Monus who grew the companyfrom 70 stores by 1987 to 310 by 1992 with 25,000 employees in 34 states.Then the business came to a low point in its gains so the executives put together a planto show for appearances purpose that the company was performing at the same leveluntil they were discovered because one travel agent was paid $80,000 for a delinquentWorld Basketball League with a check issued by Pha-Mor Inc; curios about this issue, thetravel agent asked a friend to place an inquiry about this issue to a Phar-Mors outsidecounselor, which happened to be the brother of chief financial officer David Shapiraand he began to do a lot of questions resulting in a $500 million accounting fraud.How the fraud was perpetrated:a) In 1998 Phar-mor presented lower margin of profit than expected then Munoshad Phar-mor liability increased as a result of inventory purchased billed andnever received from Tamco, his sister company. These purchases
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