Healthsouth Fraud Risk Factors

HealthSouth & Fraud Risk Factors HealthSouth was faced with a number of incentives and pressures that contributed to its fraudulent actions. For instance, the doubling of pretax earnings in 2000 although sales only grew about 3%, management’s commitment to meeting the Wall Street analysts’ expectations, and the significant financial interest and business dealings that the directors had with the company. The financial interest of the directors certainly increased their motivation and drives to see the company succeed.
Also, HealthSouth had expenses that were based on significant estimates, which created opportunities for fraudulent reporting. For instance, HealthSouth had a substantial allowance for doubtful accounts that was at management’s