Sir Nadir dominant CEO. Always claimed innocence. Fled country. Came back to clear his name and in 2012 was sentenced to 10 years. He had moved company cash Into his personal bank account. Some of this was used to buy Poly Peck shares to keep the price up. In 2002 the accounting disciplinary body, the Joint Disciplinary Tribunal, fined Story Hayward EYE,OHO for Its role as group auditor to Poly Peck. Ordeal & Co, the north Cypriot accounting firm was also fined for Its audit of the north
Cypriot subsidiaries of Poly Peck In 1988 and 1999. 2. Enron 2001 Massive fraud. AAA helped to set up off balance sheet schemes. Loss making operations not consolidated. Arthur Anderson Implicated and broken up. 3. Parallax 2002 Italian company. Understated Its debts. Forged certificates from banks that claimed Parallax held cash assets. In September 2009, three lawsuits by Parallax Capital Finance Ltd. And Enrich Bond, CEO of Parallax, against Bank of America and auditors Grant Thornton were dismissed.
Auditors not expected to spot forgeries? 4. Lehman arose 2008 This bank went bust during the financial crisis. They were very risky and tried to hide risky assets to appear less risky. Main way was by using roper 105 transactions – nasty assets ‘sold’ and repurchased the day after the year-end. Bank showed sales and cash rather than loan and cash. Lehman did transactions in London and got London lawyers to say the transactions were sales. Apparently US lawyers would have to said they were sales.
I-J accountants would have used ‘substance over form’ to ignore the lawyers’ view. US accounting rules are seen as form over substance’ – US auditors followed legal advice. E&Y not pursued by US regulators but there are still some outstanding claims: 5. Autonomy 2011 HP purchased this company and in 2012 claimed Autonomy’s accounts were not true and fair’ because they had inflated revenues. Financial Reporting Council (FRR) said to be investigating the auditors Dolomites.