Phar-Mor: Case Study

Phar-Mor was known as one of the leading discount chain retailers from the late 1980's to the early 1990's. It was founded by Natural Gamblers Mickey Monas who made "cookbook" over the years with the help of senior management to hide his loss. Senior management agrees that the reason for this fraud is that they believe that leaders can correct everything in the future. This case is known as one of the biggest fraud accounting in the history of American companies. In this article we will analyze the person affected by this fraud, the motive behind it, and the control system that can not be blocked.

Phar-Mor's story is a fraudulent story, one of the biggest stories in the history of American companies, it is also a modern moral drama. . FAR MORE Corporation This is a discount store that grew dramatically in the short term. Beginning in 1985 and 1992 in 15 stores, it increased to over 310 stores in 32 states. As their success grows, competition from large retailers such as Wal-Mart began to worry about what would happen to their own company. The president, founder, Chief Operating Officer of Phar-Mor is Mickey Monus, and with the growth of Phar-Mor he became very luxurious.

Phar-Mor, Inc. was a discount grocery store that flourished in the late 1980s. Phar-Mor is about to launch the product early, but the profit margin is insufficient to pay the bill. By the early 1990s, Phar-Mor declared bankruptcy for fraudulent financial reporting and misuse of assets and was one of the greatest misconducts in American history. In the following, we analyze the incentive / pressure, opportunities, attitudes / rationalization that enables the initiation and continuation of fraud at Phar-Mor using audit standard AU 316.85 Appendix A and the video "How to Steal $ 500 Million" To do.

When opportunity chief financial officer told President Phar-Mor that he was in a loss condition, President Phar-Mor knew how to report financial statement losses and inappropriate assets illegally. The trusted board of directors and any internal audit committee permitted reporting of illicit financial statements over many years. Phar-Mor's organizational structure is ineffective and lacks many management activities such as job separation, approval, documentary and IT management. As a result, the president of Phar-Mor is appointed as a senior executive or executive, giving him the opportunity to manage fraud and conceal it among other members of the organization. , Cooper and Lybrand LLP