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1 – 10 of 116Adam Waytz and Vasilia Kilibarda
In 2011, Sherry Hunt was a vice president and chief underwriter at CitiMortgage headquarters in the United States. For years she had been witnessing fraud, as the company bought…
Abstract
In 2011, Sherry Hunt was a vice president and chief underwriter at CitiMortgage headquarters in the United States. For years she had been witnessing fraud, as the company bought billions of dollars in mortgage loans from external lenders that did not meet Citi credit policy and sold them to government-sponsored enterprises (GSEs). This resulted in Citi selling to GSEs such as Fannie Mae and Freddie Mac pools of loans that were considerably defective and thus likely to default. Citi had also approved hundreds of millions of dollars' worth of defective mortgage files for U.S. Federal Housing Administration insurance. After reporting the mortgage defects in regular reports, notifying and working closely with her direct supervisor (who was subsequently asked to leave Citi after alerting the chairman of the board to these issues) to stop the purchase of defective loans, leaving anonymous tips on the FBI's and the Department of Housing and Urban Development's websites, and receiving threats from two of her superiors who demanded that she change the results of her quality control unit's reports, the shy and conflict-avoidant Hunt had to decide who she should tell about the fraud, and how.
The case gives students the opportunity to recommend how Hunt should proceed based on their analysis of the stakeholders involved. To aid instructors, the case includes Kellogg-produced videos of Hunt—the only on-camera interviews she has ever given—explaining what happened after she reported the fraud to Citi HR and, later, the U.S. Department of Justice. Within the case, students are also briefly exposed to legislation and bodies pertinent to whistle-blowing in the United States, including the Dodd-Frank Act, the Sarbanes-Oxley Act, and the SEC Office of the Whistleblower.
This case won the 2014 competition for Outstanding Case on Anti-Corruption, supported by the Principles for Responsible Management Education (PRME), an initiative of the UN Global Compact.
Analyze stakeholders' motivations to prepare counter-arguments to the resistance one might encounter when reporting unethical behavior
Write a script for who to tell, how, and why
Discuss how incentive structures, management, and culture play roles in promoting or hindering ethical behavior in organizations
Identify behaviors that help a whistle-blower be effective
Gain experience resolving ethical dilemmas in which two values may conflict, such as professional duty and personal ethics
Analyze stakeholders' motivations to prepare counter-arguments to the resistance one might encounter when reporting unethical behavior
Write a script for who to tell, how, and why
Discuss how incentive structures, management, and culture play roles in promoting or hindering ethical behavior in organizations
Identify behaviors that help a whistle-blower be effective
Gain experience resolving ethical dilemmas in which two values may conflict, such as professional duty and personal ethics
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Keywords
The subject areas for this case are auditing, fraud and investigations. It is also relevant for teaching aspects of corporate governance.
Abstract
Subject area
The subject areas for this case are auditing, fraud and investigations. It is also relevant for teaching aspects of corporate governance.
Student level/applicability
This case consolidates techniques and methodologies of special investigations and demonstrates weaknesses in governance and internal controls. It is appropriate for final year undergraduate students and graduate students who have attended classes on basics of accounting and financial reporting.
Case overview
The case is about institutional governance and the effects of ineptness at different levels of an organization that resulted in TAS. 133 billion being “improperly” paid out to 22 firms in the financial year 2005/2006.The case is structured to focus at the dilemma of the Director of Finance as an individual who featured in the latter stages of an extensive fraud where old unclaimable debts were revived and were being claimed and paid to fictitious assignees involving a number of Central Bank officials. However, the case seeks to interrogate issues related to financial records and controls in which the position of Director of Finance had more relevance.
Expected learning outcomes
Working on this case should result in enabling students to acquire expertise necessary for forensic accounting. It should also enable students to learn to gain an understanding of the practice of investigative and forensic accounting as well as an understanding of the interrelationships of the parties involved in forensic investigations.
Supplementary materials
Teaching note.
Details
Keywords
Gatot Soepriyanto and Amelia Limijaya
The learning outcomes are as follows: Students/participants can understand the type of financial fraud pertaining to the case; Students/participants can analyse the case using the…
Abstract
Learning outcomes
The learning outcomes are as follows: Students/participants can understand the type of financial fraud pertaining to the case; Students/participants can analyse the case using the fraud triangle perspective; students/participants can describe detection/anticipation strategies to prevent such acts from taking place in the future; students/participants can evaluate the case using the ethical decision-making framework; and students/participants can comprehend the importance of financial literacy when investing, especially in this digital era.
Case overview/synopsis
This case discusses the investment funds mismanagement accusations addressed to PT Jouska Finansial Indonesia (Jouska). Jouska is a financial planner business that was immensely popular among Indonesian young investors. It actively posted interesting content on its social media accounts, gaining attention from the millennial and Gen Z generations. However, in 2020, many of its clients reported and filed complaints that their portfolio values decreased significantly because of Jouska’s decision to invest their funds in low-quality stocks. Jouska was also alleged to violate its role as a financial planner by being able to perform several activities that fell under the authority of investment managers. This case attracted the attention of authorities so that the Investment Alert Task Force (SWI) stopped Jouska’s operational activities and initiated an investigation into the case. SWI also blocked Jouska’s websites, applications and social media accounts, in cooperation with the Ministry of Communication and Information. Despite settlement agreements that Jouska claimed had been offered to several clients, at the end of 2020 some of its clients and former clients filed a formal lawsuit. As of January 2021, several alleged criminal actions attributed to Jouska were still under investigation, comprised of money laundering, clients’ funds embezzlement, fraud, and insider trading. In October 2021, Aakar’s status was a suspect in the allegations. This case is another example of investment misconduct or fraud; to put it another way, it is the effect. It is expected that the participants can deliberate other perspectives during the discussion that could be the cause of such a case, hence viewing it holistically.
Complexity academic level
Undergraduate level.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS 1: Accounting and Finance.
Details
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Alexander W. Ng, Lasse Mertins and Charles L. Martin
Winstar Communications was a successful and fast growing telecommunication company in the 1990s and early 2000s. However, in the early 2000s, the company started to struggle…
Abstract
Synopsis
Winstar Communications was a successful and fast growing telecommunication company in the 1990s and early 2000s. However, in the early 2000s, the company started to struggle financially. In 2000, Grant Thornton audited Winstar, issuing an unqualified opinion. After Winstar went into bankruptcy in 2002, investors started to question the quality of the audit. This teaching case is based on the Gould v. Grant Thornton case that was tried in the United States Court of Appeals in 2011/2012. It provides accounting students with an opportunity to learn about auditing procedures and the consequences when auditing procedures are not correctly followed.
Research methodology
Teaching case study.
Relevant courses and levels
This case study is suitable for introductory undergraduate auditing, advanced undergraduate auditing and master level auditing courses.
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Benedicte Millet-Reyes and Nancy Uddin
The impact of corporate governance on internal controls and quality of financial disclosures.
Abstract
Theoretical basis
The impact of corporate governance on internal controls and quality of financial disclosures.
Research methodology
Analysis of a real financial fraud event for a non-US multinational corporation. The case relies on accessing and analyzing annual reports for the firm, both before and after the fraud. Additional information on industry governance characteristics are provided in the case itself so that students can compare the firm to the industry.
Case overview/synopsis
This business case is centered on the analysis of Schneider Electric, a French multinational corporation, which had to restate their financial statements in 2011 because of accounting fraud. Following this event, Schneider undertook major changes in their board structure to improve internal control mechanisms. This pedagogical business case familiarizes students with international differences in ownership and board structure and emphasizes potential corporate governance changes after financial statement fraud.
Complexity academic level
Managerial finance, corporate finance, international finance, auditing. This case is more appropriate for upper-level undergraduate and graduate courses.
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The case “Corporate Governance Failure at Ricoh India: Rebuilding Lost Trust” discusses the series of events post disclosure of falsification of the accounts and violation of…
Abstract
Subject area
The case “Corporate Governance Failure at Ricoh India: Rebuilding Lost Trust” discusses the series of events post disclosure of falsification of the accounts and violation of accounting principles, leading to a loss of INR 11.23bn for the company, eroding over 75 per cent of its market cap (Financial Express, 2016). The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. The case highlights the responsibility of the board of directors, audit committee and external auditors and discusses the changes required in the corporate governance structure necessary to ensure that such incidents do not take place. The case also delves into the classic dilemma of degree of control that needs to be exercised by the parent over its subsidiaries and freedom of independence given to the subsidiary board, which is a constant challenge all multinationals face. Such a dilemma often leads to the challenge of creating appropriate corporate governance structures for numerous subsidiaries.
Study level/applicability
The case is intended for MBA courses on corporate governance, business ethics and also for the strategic management courses in the context of multinational corporations. The case can be used to develop an understanding of the essential of corporate governance with special focus on the role of the board of directors, audit committee and external auditors. The case highlights the consequences and cost of poor corporate governance. The case can also be used for highlighting governance challenges in the parent subsidiary relationship for multinational corporations. The case can be used for executive training purposes on corporate governance and leadership with special focus on business ethics.
Case overview
This case presents the challenges faced by the newly appointed Chairman Noboru Akahane of Ricoh India. In July 2016, Ricoh India, the Indian arm of Japanese firm Ricoh, admitted that the company’s accounts had been falsified and accounting principles violated, leading to a loss of INR 11.23 bn for the financial year 2016. The minority shareholders were agitating against the board of directors of Ricoh India and were also holding the parent company responsible for not safeguarding their interest. Over a period of 18 months, Ricoh India had been in the eye of a storm that involved delayed reporting of financials, auditor red flags regarding accounting irregularities, a forensic audit, suspension of top officials and a police complaint lodged by Ricoh India against its own officials. Akahane needed to ensure continuity of Ricoh India’s business and also act quickly and decisively to manage the crisis and ensure that these incidents did not recur in the future.
Expected learning outcomes
The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. More specifically, the case addresses the following objectives: provide an overview of corporate governance structure; highlight the role of board of directors, audit committee and external auditors; appreciate the rationale behind mandatory auditor rotation; appreciate the consequences of poor corporate structure; explore the interrelationship between sustainability reporting and transparency in financial disclosures of a corporation; understand management and governance of subsidiaries by multinational companies; and understand the response to a crisis situation.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CSS 11: Strategy.
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The case study will help to learn about the importance of pre-sanction precautionary measures before lending to self-help groups (SHGs), to learn about the potential lapses and…
Abstract
Learning outcomes
The case study will help to learn about the importance of pre-sanction precautionary measures before lending to self-help groups (SHGs), to learn about the potential lapses and errors while sanctioning SHG finance and to learn about the importance of bank’s guidelines and compliance before sanctioning loans.
Case overview/synopsis
This case study details the tenure of Seema in a rural branch of Safe Bank of India located in Haryana which she joined as a manager in the year 2016. She overachieved the target given by the district collector office, and going by the tide, she kept her reliance on the references provided by non-government organization (NGO) without complying the bank’s instructions. She committed errors while sanctioning the loans, which led towards the upsurge of non-performing assets of the branch. Later on, after investigation it was discovered that she did not follow fundamental bank’s instructions. In wake of those lapses and errors, how she could have avoided those lapses and secure the public money? What were the most important documents while granting agriculture finance and what due diligence she should have taken? How did she treat calls from the government departments? Was she right in trusting the suggestions of the NGO?
Complexity academic level
This case study caters to students of various streams, namely, management, business administration and law, and can be targeted at both undergraduate and postgraduate students. It could be suitable for several types of courses and students. Furthermore, this case study can also be targeted for various training programmes for bank employees and employees of various lending institutions engaged in agriculture finance and credit linkage programmes.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CSS 1: Accounting and finance.
Details
Keywords
To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to…
Abstract
Research methodology
To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to review the conceptual framework that is typically covered in Intermediate 1 to respond to question 5.
Case overview/synopsis
This case is based on the three financial statement restatements that Weatherford International Ltd. made over an approximately 18-month period. The restatements were due to a fraud committed by manipulating the income tax accrual in the financial statements. The manipulation used was to overstate the amount of income used to calculate the dividend exclusion and then use a relatively high tax rate to calculate the resulting tax benefit. The tax rate used for the fraud was substantially more than Weatherford’s effective tax rate (ETR), which was a prominent part of the company’s strategic growth plan. The tax senior with the external auditors who reviewed the entry made for the dividend exclusion captured the inconsistency with the comment that “This [the entry] deserves a huh?” The case is intended for students in Intermediate 2, where financial statement restatements and their effect on the company’s financial statements are typically covered. During the years covered in this case, Weatherford was also under investigation for violations of the Foreign Corrupt Practices Act (FCPA). Weatherford’s FCPA violations included multiple instances of bribery, the inappropriate use of volume discounts, improper payments and kickbacks in the United Nation’s Oil for Food program. Weatherford received the eighth-largest fine in the history of FCPA violations (at that time) of $152m. Weatherford’s FCPA investigation expanded, and the company paid another $100m in fines for violations of sanctions law and export control law. This case focuses only on the fraudulent manipulation of the financial statements through the tax accrual and does not delve into the other investigations. However, the linkage between those investigations and the fraud in this case is Weatherford’s nonexistent internal controls.
Complexity academic level
This case was designed to be used in Intermediate 2 financial accounting classes to highlight financial statement restatements and review the conceptual framework and materiality. The students who used the case did not have difficulty with the tax aspect of the case. However, most of the students had taken one tax class previously or concurrently. If students have not had any exposure to tax, the instructor might want to walk students through the tax aspects of the case.
Details
Keywords
This case is based on Weatherford International’s settlement with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Both the SEC and the DOJ were…
Abstract
Theoretical basis
This case is based on Weatherford International’s settlement with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Both the SEC and the DOJ were critical of Weatherford for its violations of the Foreign Corrupt Practices Act and for its “inadequate internal controls.” This case explores the Foreign Corrupt Practices Act (FCPA) violations and issues related to internal controls.
Research methodology
Case study.
Case overview/synopsis
This case is based on Weatherford International’s settlement with the SEC and the Department of Justice. Weatherford provided equipment and services in the oil and gas industry. Because international markets were growing faster than domestic markets, Weatherford made a strategic decision to pursue growth in international markets. The oil and gas industry has high levels of operating risk as did the countries that Weatherford decided to pursue operations in. However, despite the decision to take on additional risk, Weatherford failed to implement adequate systems of internal controls. The title of the case “A Perfect Storm” refers to Weatherford’s trifecta of operating in an industry with high levels of corruption risk, countries with high levels of corruption risk and failing to implement adequate internal controls despite those high operating risks (Department of Justice, 2013). Weatherford was ultimately assessed a $152m penalty for its violations of the FCPA that included bribery, volume discounts, improper payments and kickbacks.
Complexity academic level
Undergraduate and graduate auditing classes.
Details
Keywords
Entrepreneurship, new venture management, new venture planning.
Abstract
Subject area
Entrepreneurship, new venture management, new venture planning.
Study level/applicability
The case involves various issues within entrepreneurship and the new venture management field such as business model, SWOT analysis, Pros and Cons analysis and challenges faced during the idea commercialization phase. Thus, this case can be used for covering multiple perspectives related to entrepreneurship and new venture planning. This case is useful for discussion in a session on opportunity recognition at ideation stage. This case is also ideal to teach the “Business Model Canvas”, which is fast gaining centre-stage for modern enterprises. The case also covers issues within strategic management such as what actually constitutes a strategy.
Case overview
The case is based on a field study and primary data collected by interviewing the co-founder of the portal www.drivers420.com. This case describes a situation in which Malkit Singh Bal (Bal) Partner of Bal Road lines shares with Mr Amarpreet Singh (Singh), who was about to be hired as a consultant for Bal Roadlines, information regarding the rise in fraud and crime carried out by fleet drivers and asks him to help him find a solution to the problem.
Expected learning outcomes
Prepare a “Business Model Canvas” for the successful operation of business by identifying intended customer segment, value proposition, cost structures and revenue streams. Conduct “Pros and Cons” analysis for starting a business. Conduct “SWOT” analysis for starting a business. Understand what actually constitutes a strategy and understand the five elements constituting strategy.
Supplementary materials
Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CSS 3: Entrepreneurship.
Details