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"Case Studies" > Criminal - White Collar > Outside Auditor Absolved of Complicity in Accounting Fraud

Outside Auditor Absolved of Complicity in Accounting Fraud

Summary:


An important defense position was that there were no financial contributions
that would funnel to the defendant as compensation for his complicity in the
scheme. This chart summarizes defendant’s lack of financial motive.

A business software manufacturer that enjoyed tremendous growth in the late 1990s created keen investor interest to maintain its remarkable growth rate. In response, senior management developed an elaborate scheme to make the company’s quarterly financials appear better than they actually were. Facing prosecution for fraudulent behavior, most of the senior management team plea-bargained in exchange for testifying against several mid-management personnel and the defendant, an outside consultant.


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