HealthSouth’s governance had many major flaws in their governance. The ones that stood out to me were, first, they lacked a strong ethical environment. Employees either lacked the courage to report financial manipulation or they lacked ethical awareness. This culture allowed HealthSouth’s CEO Richard Scrushy to do as he chose without any opposition. Second HealthSouth’s accountants did not fully understand their professional duty and could not convince the CEO that what they were doing was wrong. Third HeadSouth’s board members lacked independence. Board of directors either failed to understand accounting issues or were working with Scrushy. Fourth HealthSouth lacked sufficient audit procedures and audit risk assessments. Finally, there
