Defects in the companys system, Financial Management

Assignment Help:

The case of McKesson & Robbins scandal (1938) was happen due to internal fraud. This case is also happen by the faulty work of board of directors. The organization of McKesson & Robbins, Inc. had been taken on by Phillip Musica in the year of 1925. Musica also used a assumed names by that he did hide his original identity and due to this he did take the control of management in two companies. In the context of Adelphia Pharmaceutical, Musica used the name such as Frank D. Costa and also used F. Donald Coster for the organization of McKesson & Robbins. Even though, Musica was expanded the legitimate the business operations of the company successfully. But he also recruited his brothers in both the organizations by their hiding identity in which his two brother took the part inside the company and one did his work from the outside of he company (Clikeman, 2008). With the help of this, Musica generated fake documents related to the sales of company and also paid huge commissions to the company of shell distribution by the help of their control. They also made internal transactions for them and also made the assets about the $20 million by making phony balance sheet.

There was several defects in the internal systems of the company by that Musica did non ethical work and also made huge money for their self on the basis of companies assets. The internal audit of the company also was weak and the recruitment system of the  company by that Msica did  make huge money. Hence, the management would use the audit tests of internal controls that would help the auditors to stop the internal misconduct (Clikeman, 2008). With the help of this, the organization would improve the internal systems of the company also reduces the internal fraud.


Related Discussions:- Defects in the companys system

Life insurance - property and causality insurance, What are the differences...

What are the differences between life insurance and property and causality insurance? Life insurance prevents against death, retirement and illness. Companies obtain premiums b

Balance sheet and income statement, Do these two problems in Excel. Balance...

Do these two problems in Excel. Balance Sheet and Income Statement.  The following information is used for the first two problems.  Problem 1 is the income statement and problem 2

Calculate expected gain or loss from the forward hedging, 1. A company sold...

1. A company sold a super computer to an Institute in Germany on credit and invoiced DM 10 million payable in six months. Presently, the six-month forward exchange rate is $1.50/DM

Explain about the audit risk, Audit risk Obtain understanding of ac...

Audit risk Obtain understanding of accounting and internal control systems. Sufficient to plan audit and develop effective audit approach. Professional judgement to

Define where security returns are found less correlated, Security returns a...

Security returns are found to be less correlated across countries than within a country. Why can this be? Answer:  Security returns are less correlated possibly because countries

Management of working capital, Q. Management of Working Capital? Workin...

Q. Management of Working Capital? Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore

Explain why warrants are rarely exercised, Explain why warrants are rarely ...

Explain why warrants are rarely exercised unless the time to maturity is small? Warrants are seldom exercised till the time to expiration is small because the market price of the

Money market instruments, Just as any other financial market, money m...

Just as any other financial market, money market also involves transfer of funds in exchange for financial assets. Because of the nature of the money market, the

Corporate governance, CORPORATE GOVERNANCE Corporate governance can be ...

CORPORATE GOVERNANCE Corporate governance can be stated in different ways, for example: The Private Sector Corporate Governance Trust (PSCGT) defines that corporate governan

Define policy formulation - accounts receivable management, Q. Define Polic...

Q. Define Policy formulation - accounts receivable management This is concerned with set up the framework within which management of accounts receivable in an individual compan

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd