Homework: Critical Thinking
FRAUD CASEBOOK
Phar-Mor
Read the following articles or other related articles regarding the Phar-Mor case and then answer the questions below:
Short Answer Questions
• In June of 1990, how large was the capital infusion to facilitate Phar-Mor growth?
• Who was Phar-Mor's flamboyant Chief Executive Officer?
• Who was Phar-Mor's Chief Financial Officer?
• On what date did Phar-Mor announce that David Shapiro would assume the duties of President and Mickey Monus Vice-Chairman?
• How long was Mickey Monus's prison sentence?
• Is Mickey Monus now out of jail?
Task
• In a fraud case, why does each party (e.g., management, board, audit committee, auditors, lawyers, etc.) usually blame another party for the fraud?
• Discuss the reasons for this phenomenon and explain the probable reasons why no one who knew about the fraud came forward to stop it?
• Consider your role as a junior accountant within a company or new staff member within an audit/tax professional services firm. How should you protect yourself from becoming an unwitting participant in a fraud.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Reference
• Markowitz, Arthur, "There's Phar-Mor to ‘Drug' Chain than Meets the Eye," Discount Store News, September 2, 1991.
• Freudenheim, Milt, "Phar-Mor and Its Ex-Auditor Clash on Fraud Case," Drug Store News, August 6, 1992.
• Frederick, James, "Scandal Rocks Phar-Mor," Drug Store News, August 17, 1992.
Gilpin, Kenneth N., "Coopers & Lybrand Sues Phar-Mor Executives," The New York Times, August 21, 1992.
• Bloomberg Business News, "Accountants Sue Phar-Mor," The New York Times, September 12, 1992.
Murray, Matt, "Phar-Mor, Inc. Reaches a Settlement of Claim Against Coopers & Lybrand," The Wall Street Journal, October 4, 1995.
• Associate Press, "Phar-Mor Founder Gets Long Sentence," The New York Times, December 2, 1995.