Diane Backis, an accounting manager at Cargill caused the company a loss of at least $25 million and stole more than $3.1 million from the company over a period of 10 years. She pleaded guilty to charges of mail fraud and false tax filings. She has agreed to pay Cargill $3.5 million, forfeit her home, give up her investment brokerage account and her Cargill pension. For the guilty charges she could also be imprisoned for up to 11 years.
What did she do? Well, Backis did quite a few accounting fraud tactics to enrich herself. Her job was to create customer contracts, generate and mail invoices, receive and process payments from customers. She would create and send fraudulent invoices with significantly discounted prices (reducing the company’s revenue), then ask the customers to send money to her office location instead of directly to the company’s financial institution, which was the required process, she would then deposit these checks in her personal account. To cover it all, she would book incorrect entries in the books and reverse those in a later month. Similarly, she would misapply the payments in wrong customer accounts, which made it look like various customers owed Cargill money, but then later she would go and reverse those entries. Her accounting scheme was so detailed that she was able to go unnoticed for over a decade.
Serious Fraud Office (SFO) confirmed that Tesco’s former chief executive Philip Clarke will not face charges in relation to an accounting scandal at the supermarket chain
Wesley R. Bricker to take over as Chief Accountant of the US SEC after the retirement of the current Chief Accountant James Schnurr.
The fight between HP and Autonomy saw the former autonomy CFO, Sushovan Hussain, being charged with accounting fraud by a federal grand jury in the US. The charges against Hussain alleged that he made false and misleading statements about Autonomy’s finances, put fraudulent entries into the company’s books, issued false and misleading quarterly and annual reports, and pressured and paid off people who raised complaints about the firm’s financial practices and performance.
The war between HP and Autonomy’s former management started when HP found issues in the Autonomy’s financials a few months after they bought the company for billions of dollars. More specifically; HP bought Autonomy in Q4 2011 for £6.7 billion, but in 2014 HP revised the 2010 accounts for Autonomy reducing the revenue and profit by up to 81%. HP took a £4 billion hit when they wrote off their investment in Autonomy.
The interesting thing in the deal was that all of the Big 4 firms were directly or indirectly involved in the transaction. Deloitte was the auditor for Autonomy and signed off on their 2010 financials, KPMG did the due diligence on Autonomy, PwC carried out the report into the takeover and finally EY are HP’s auditors and signed off on the restated financials. So in this case not sure which one of the audit firms are to be blamed! Maybe its a group effort.
Weatherford International announced the sudden exit of it’s CEO Bernard Duroc- Danner. The move though sudden is not unexpected. Recently the company settled with SEC on deceptive accounting charges. The company had overstated its results to meet its earlier announced projections and analyst’s expectation.
In light of that, it would make sense for the company’s CEO to leave, wouldn’t it?