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All the Queen’s Horses
On February 14, 2013, Rita Crundwell, former comptroller for the city of Dixon, IL was sentenced to 19½ years in prison for stealing more than $53 million from Dixon. Crundwell’s crime went on record as the largest municipal fraud in U.S. history. Just as shocking as the amount stolen from this small Illinois town, was the fact that Crundwell engaged in her scheme to pillage Dixon for 20 years before being discovered.
Crundwell’s fraud shines an unflattering spotlight on the accounting profession and the role of the audit. The relevance of the audit has been in question since the uncovering of massive corporate frauds dating back to Worldcom and Enron. Subsequent to Crundwell’s conviction, the city of Dixon sued its auditors, accountants and bank, settling their claim against them for $40 million.
After viewing the video and reviewing the related resources, please submit a 3-4 paragraph initial post, addressing the following:
Describe the fraud scheme committed by Rita Crundwell, including how she concealed the fraud.How did Rita Crundwell steal over $37,000 each day from a town with an annual budget of around $6 million?Discuss the application of the fraud triangle and other fraud theories we have covered as they apply to this case study.How could this fraud have been prevented? In your discussion, be sure to explain the controls that were missing at City Hall.How could such embezzlement go undetected in annual audits by two independent accounting firms and in annual audit reviews by state regulators? How was this fraud continued for so many years? What red flags did the auditors miss?How did residents not become suspicious of Crundwell’s extravagant wealth and frivolous spending?How was the fraud finally detected? Explain the legal side of the case.
The Greek Economic Crisis (Stratfor, 2011) Greece, a land loaded with struggle over her long and celebrated life. Greek geology has been both a gift and a revile from the beginning of time that stretches back to the sixth century BC. Greece has given the world numerous endowments, the principal Olympic Games in 776 BC and traditional Greek culture, particularly reasoning, which affected the early Roman Empire. (Friedman, 2011.) Classical Greece is commonly viewed as the support which gave the establishment of present day Western culture and human progress. Greece is known for holding Europe’s most established money. Around 2,600 years prior Greece begat the main tradeable money on the European mainland, the drachma. Since Greece’s commencement numerous monetary forms that had a place with possessing countries displaced this unique type of installment until the 1820’s the point at which the drachma come back to remain, the drachma was at long last supplanted with the Euro in 2002 (McGinnis, 2004.) How could a nation that established European cash with establishes in antiquated and scriptural occasions become the point of convergence in the inevitable close to disappointment of the European financial framework? What prompted the emergency that still takes steps to break down the EU as a typical money element? Is a “Grexit” (A Greek exit from the EU) or a “Grecovery” (A Greek financial recuperation) the end game for the nation otherwise called the “Hellenic Republic?” As indicated by George Britos, Greece accomplished five particular periods of its monetary cycle beginning with development from post WWII over some stretch of time extending from 1945 until 2010 during which time accomplishing a transient financial development progress pursued by a long moderate decay and suddenly smashing post Eurozone section. The financial development and social advancement accomplished by Greece in the post WWII years eased back definitely after 1974 on the grounds that numerous foundations supporting the effective and free-showcase activity of vote based system were thrown away with the presentation of another communist constitution with exacting arrangements. (Bitros, 2013.) These strategies decreased competiveness choked development and the economy of Greece shrank definitely from which it still can’t seem to recoup. The main stage as appeared in figure 1 beneath happened in the years preceding 1974. The genuine development rate was around 6.9% which post WWII and an economy wrecked is an accomplishment unto itself this likewise implies in those years the economy about multiplied multiple times. The second stage which kept going from 1974 until 1981, the development rate dropped by almost half to around 3.5% which is as yet a truly good development rate. The third stage between the long stretches of 1981-1994 showed a development rate that scarcely surpassed a downturn rate with under 1% development in excess of a half decay from the past period and almost a 87% decrease from the year’s pre-1974. The forward stage, which endured from 1994-2008 saw a slight uptick in financial movement until 2008 and in conclusion, the economy as of late entered a fifth stage with negative development rates which are averaging -3.2% during the periods 2009–2011. Generally speaking the development paces of the period 1954–2010 have pursued a negative pattern sinking from a high of 6.9% to a low of – 3.2% and decline in over 10%. In Fig. 1, this is shown by the descending incline of the spotted line, which compares to the accompanying condition: %?GDP = 0.126T – 0.0006T2 (3.63) (-3.57) ¯R^2 = 0.23 D.W = 2.0 RHO = 0.185 (Bitros, 2013) Fig. 1. The chronicled record of monetary development. “Where the factors % ?GDP and T separately speak to the rate change of GDP and the year; ¯R2 is the balanced coefficient of assurance; D.W represents the Durbin-Watson measurement; RHO is the autocorrelation coefficient, and the figures underneath the parameter gauges give the estimations of the t-measurement” (Bitros, 2013 pg 3.) The timeframe of monetary development reflects the adjustments in human and physical capital. Figure 2 shows the time designs that think about the efficiency for physical and human capital against all out variables of profitability since the 1960’s. Capital topped around 1974, the high development rates came legitimately from increments in human and physical capital while capital decreased bottoming out in 1995. In the period 1974–1981, the pace of increment in the efficiency of these two gainful elements declined, with the outcome that the pace of monetary development backed off to a large portion of the normal pace of the past period. (Bitros, 2013) Fig. 2. The wellsprings of monetary development (Bitros, 2013 pg 4.) The range 1981–1994 saw monetary development breakdown, the decrease in the efficiency of physical capital was not offset the adjustments in profitability from every single other source. From 1994 to 2008 the development of work profitability quickened altogether, yet then again physical capital expanded just respectably, raising monetary development to the normal 1974–1981 rate. The decrease in all profitability since 2008 clarifies the decay into the domain of negative development rates. This shows Greece comes up short on the characteristic capacity to create capital, there are next to zero common assets, spare the Aegean Sea, an absence of arable farmland and because of Greece’s geology is far away from Europe’s capital producing focuses. Greek port’s that could be utilized for exchange are encompassed by mountains and precipices making business troublesome. This manages Greece no place for populace development, and adds to its powerlessness to deliver a lot of residential capital. This, joined with the regionalized way to deal with political power energized by hilly topography, has made Greece a nation that has been wastefully disseminating what minimal capital it has had for centuries. Moreover Greece comes up short on a solid working class to purchase products that would support exchange (Friedman, 2011.) Coming up short on a solid working class, and managing an ineffectively managed hand of topography, exchange and financial aspects by the mid 1970’s Greece had arrived at an intersection. It was run however a military Junta that considered open races, the gathering that assumed control over the administration from 1975-1981 utilized amazing financial sense to again develop complete generation of the economy and the commitment of work, even with a decrease in outside capital. It gave the idea that Greece would shake off the times of negative development and proceed develop. 1981 decisions saw an arrival to the group of Papandreou to the initiative of the nation. This equivalent year Greece was permitted passage into the EC the then “European Community” a forerunner to the cutting edge European Union (Kulukundis, 2014.) The participation into the EC enabled Greece to exploit various sponsorships which the administration at that point used to purchase votes and influence general feeling to hold rule. In the challenge between the two prevailing ideological groups during that period and the decades that pursued, the Greek common help part turned into the main manager of the nation as the quantity of individuals working for the administration expand to the point where it arrived at the most noteworthy level of open representatives of any work power in Europe, a full 25% of the populace chipped away at the legislatures finance. Annuity plans, benefits, all to keep the administration in control, a large number of the laborers had no genuine duties. Entire families were raised on the returns and came to rely upon the salary for over an age. It was here that the seeds of falsity were planted, the Greek people groups had at last figured out how to maintain an unrealistic lifestyle and revel in overabundance. It was presently that crushing plates in cafés, a signal praising waste for the wellbeing of its own, arrived at its pinnacle.>GET ANSWER Let’s block ads! (Why?)