In 1999, Richard Scrushy overstated HealthSouth’s earnings by at least $1.4 billion in order exceed the expectations of Wall Street earnings. During this time investors and lenders were more concerned with revenue than profits. Generally Accepted Accounting Principles (GAAP), stated if policies and procedures were not violated then they are considered legal, and ethically adequate. This allowed HealthSouth to meet expectations of analyst for 40 consecutive quarters, by using creative and fraudulent accounting methods. The false recordings increased earnings matched by increases in HealthSouth's assets. In 2002, HealthSouth's assets were overstated by at least $800 million, or 10 percent. This fraudulent activity went undetected until 2003.
