The Scandal Of Healthsouth Corporation Scandal - 1391 Words

Organizational misconduct is the chief cause behind corporate accounting scandals. The trusted executives of the corporation participation in actions during a scandal are corrupt and illegal. In the United States, the Securities and Exchange Commission (SEC) is typically the government agency that investigates such scandals. One of the most notorious corporate accounting scandals in the United States is the HealthSouth Corporation scandal of 2003. HealthSouth Corporation is one of the United States largest health care providers with locations nationwide. A deeper inspection of the HealthSouth scandal is needed to understand how it transpired by assessing how it was executed, the accounting issues and root of the issue, how it was exposed, the results to the company and its officers, and warranted ramifications as an outcome of the scandal. Scandal Overview In 1984, Richard Scrushy founded HealthSouth in Birmingham, Alabama. Scrushy was the company’s Chairman and Chief Executive Officer (CEO) when the company went public in 1986. HealthSouth grew quickly over the next several years. Shortly after HealthSouth went public, it is alleged that Scrushy instructed senior staff to materially inflate the company’s earning to match expectations. In 2002, the first sign of troubles occurred when Scrushy sold $75 million of HealthSouth stock days before HealthSouth announced a large loss. After this the SEC began to investigate if any insider trading laws had been violated. In 2003,Show MoreRelatedThe Scandal Of Healthsouth Corporation Scandal1419 Words   |  6 Pagesthe chief cause behind corporate accounting scandals. The trusted executives of the corporation participation in actions during a scandal are corrupt, unethical, and illegal. In the United States, the Securities and Exchange Commission (SEC) is typical ly the government agency that investigates such scandals. One of the most notorious corporate accounting scandals in the United States is the HealthSouth Corporation scandal of 2003. HealthSouth Corporation is one of the United States largest healthcareRead MoreCase Study: Healthsouth Corporation Scandal1521 Words   |  7 PagesAnna James Case Study: HealthSouth Corporation Scandal Week3 Forensic Accounting: Ethics and Legal Environment Professor Erskine Hawkins HealthSouth Corporation is a large, public healthcare company that operates 93 inpatient rehabilitation hospital, 49 outpatient rehabilitation satellites, six long-term acute care hospitals, and 25 home health agencies. According to the company websites, it is â€Å"one of the nation’s largest healthcare providers specializing in rehabilitation†.5 The companyRead MoreHow Corporate Scandals Crush the Company, Investors, and Economy1333 Words   |  5 PagesTracing back the history of accounting scandals, major corporate scandals not only hurt the economy but also crush investors’ confidence on investing in companies. For example, the Enron scandal, the WorldCom scandal, and so on. The majority of corporate scandals are created by greedy corporate senior officers. One way to create a scandal is â€Å"cooking the books†. Cooking the book is an accounting term which means making false financial statements in order to meet the number that investors or banksRea d MoreThe Accounting Scandal of Healthsouth - Essay912 Words   |  4 PagesThe Accounting Scandal of HealthSouth HealthSouth Corporation is based in Birmingham, Alabama, it is the largest provider of rehabilitative health care services. It operates in 26 states in the United States of America and in Puerto Rico. HealthSouth provides rehabilitation hospitals, long term heightened care hospitals, outpatient rehabilitation satellite clinics and home health agencies. HealthSouth was found by Richard Scrushy in the year 1984 and was calledRead MoreThe Sarbanes Oxley Act Of 20021423 Words   |  6 PagesThe audit world was transformed more than ten years ago due to a series of accounting scandals. This change took place when The Sarbanes–Oxley Act of 2002, otherwise known as SOX, was passed affecting not only business entities but also the firms that audit those companies (Thomas). One of the companies whose fraud was unmasked by the passage of SOX was HealthSouth Corporation. A company in the healthcare industry who had overstated about $2.7 billion dollars in earnings since 1996. The company’sRead MoreHealthsouth1309 Words   |  6 PagesINTRODUCTION HEALTHSOUTH Corporation (HEALTHSOUTH) began its rise in 1984 when Richard Scrushy, Aaron Beam, and other close associates formed the HEALTHSOUTH Empire with venture capital from New Enterprise Associates of Baltimore. In the beginning, Richard Scrushy was the chief executive officer (CFO), Aaron Beam was named the chief financial officer (CFO) and William Owen, an accountant from Ernst and Young, assumed the position of comptroller. HEALTHSOUTH went public in 1986 and began rapidlyRead MoreHcs 4051142 Words   |  5 Pagesaudit conducted by PricewaterhouseCoopers concluded that HealthSouth Corporation s cumulative earnings were overstated by anywhere from $3.8 billion to $4.6 billion, according to a January 2004 report issued by the scandal-ridden health-care concern. HealthSouth acknowledged that the forensic audit discovered at least another $1.3 billion dollars in suspect financial reporting in addition to the previously estimated $2.5 billion. The scandal s postmortem report f ound additional fraud of $500 millionRead MoreThe Sarbanes Oxley Act Of 20021530 Words   |  7 Pagesthe Enron scandal the government had created a new law called the Sarbanes-Oxley Act of 2002. This law was put into place to put more responsibility onto the public accounting firms and not letting company executives violate any information for investors (Larry Bumgardner). The law also allows the Securities and Exchange Commission to oversee more corporate governance of company’s financial records. The Securities and Exchange Commission was given the power to freely investigate corporations or accountingRead MoreThe Anatomy Of Corporate Fraud Essay845 Words   |  4 Pagescomparative Analysis of High Profile American and European Corporate Scandals. The abstract discusses the analysis conducted on the three major American accounting scandals; Enron, WorldCom, and HealthSouth, and compares to the three major European accounting scandals; Parmalat, Royal Ahold, and Vivendi Universal. Bahram Soltani (2014), also discusses within the abstract the different areas reviewed regarding why the accounting scandals occurred; ethical climate, tone at the top, bubble economy and marketRead MoreEthical And Legal Perspectives, What Do You Feel Business? Learned From The Scrushy Situation?972 Words   |  4 Pagescheating happening and who is heading the deception? Behind every crime, there is a ringleader or a group of individuals calling the shots. In this case, Scrushy was the one who told his family meeting members to fix financial records, so HealthSouth to meet or exceed the business financial goals. A person from the beginning may have the objective to cheat; others get sucked into the whirlpool of white-collar crime. Corporate fraud is rampant, and it is becoming a part of our culture. We expect