Accounting Fraud

  • Category: Business
  • Words: 514
  • Grade: 90
Three Accountants Face Charges of Securities Fraud Over Audit

"The Securities and Exchange Commission took the unusual step of charging three accountants, William Buettner, Mark Kirstein and Amy Frazier with securities fraud in connection with their audits of Allegheny Health Education & Research Foundation, a Pennsylvania nonprofit organization that filed for bankruptcy, reports the Wall Street Journal." These three accounts were senior accountants at Coopers & Lybrand LLP, now PricewaterhouseCoopers LLP, which are well-recognized companies in today's world. They were trying to cover up a mask deteriorating finances at Allegheny Health, according to the SEC. The charges are so large the SEC is taking the three to court. It's rare that we would sue accountants for fraud in federal court, stated" Ronald Long, district administrator of the SEC's Philadelphia. Long also added that this was one of the first complaints taken against auditors in an alleged case of municipal-bond fraud. In 1998 Allegheny Health, the largest nonprofit health-care organization in Pennsylvania at its height, filed for bankruptcy in 1998 because of the charges. Dispute the charges, the three accountants lawyers said that "among other things, that they were "utterly false." What the accountants did will ruin there whole accounting careers. "According to the SEC, the three accountants helped Allegheny Health transfer $99.6 million from the books of a recent acquisition to an ailing unit known as the Delaware Valley Obligated Group. Allegheny Health allegedly transferred $50 million by April 1997, and moved an additional $49.6 million in July 1997." Even I know that you should not move that much money in that short of time, it seems that they were trying to get caught. If the SEC Wins the fraud case, the three will face a court order permanently burring them in there on grave, with a debt of $110,000 for each violation. Did three accountants make some mistakes or were they trying to get away with something? We will never know if they were mistakes, because they totally deny the charges. No matter what they were doing the accountants caused their company to go bankrupt, and caused themselves debt and unemployment the rest of their lives. If I have had came across this article six months ago the article would mean nothing to me. Now since I am taking accounting and understanding the finical statements, I know these fraud charges are not a small deal, it will put the three in debut and burry them in there own grave like I said before. I did not know by messing up an accounting statement you could do so much harm to the company and even greater harm to yourself. So from now on when I am in class and my balance sheet doesn't balance out I am going to make sure I figure it out, because I never want to be in the situation that William Buttener, Mark Kirstein and Amy Frazier are in. This information will not only help now while I am in college, it will hopefully save me from digging my own grave early when I am managing my own company.
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