Sunbeam begins producing electric home appliances in 1910. This company take the strategic approach of acquisition of other companies. Sunbeam was also ranked by the Fortune Magazine as one of the largest corporation in America. It was doing good till Dunlap join Sunbeam. Around 1996, Albert Dunlap was hired as the CEO of Sunbeam. The company hire him with the vision to increase the value of Sunbeam because the profits were declining for several years. He have a reputation of giving high profits for companies
With the help of a partner of Arthur Anderson, Albert committed a huge accounting fraud as the CEO of Sunbeam. Because Arthur Anderson was auditing the Sunbeam Corporation. With him joining sunbeam its stock increased by 50% in a day. He soon fired most of Sunbeam executives, and bring his own team who would go along with his mindset. Dunlap brought in his old fellow from Lily-Tulip as a CFO (chief Financial Officer) …show more content…
They all work together to gain their benefit by misstating the financial statements. This case is about the fraudulent earnings of the management by manipulating the system. As a result, Sunbeam face bankruptcy. Afterwards, Mr. Dunlap was also fired from Sunbeam in the summer 1998. SEC also try their best that Dunlap and his fellows in fraud scheme can never serve as an officer or executives in any publicly traded companies so they don’t violate any SEC law. SEC find that $62 million of sunbeam’s $189 million income don’t comply with the SEC rules. In 1997, SEC finds out that Sunbeam after Dunlap was created as a cookie jar reserve that only shows fake profits. It was pretty surprising that how Dunlap decrease the COGS of the inventory which shows huge profits when sold. In addition, Fake sales were created to show profit. Even though the auditor Harlow pointed those sales to Sunbeam corporation management, but they did not pay attention to
With the help of a partner of Arthur Anderson, Albert committed a huge accounting fraud as the CEO of Sunbeam. Because Arthur Anderson was auditing the Sunbeam Corporation. With him joining sunbeam its stock increased by 50% in a day. He soon fired most of Sunbeam executives, and bring his own team who would go along with his mindset. Dunlap brought in his old fellow from Lily-Tulip as a CFO (chief Financial Officer) …show more content…
They all work together to gain their benefit by misstating the financial statements. This case is about the fraudulent earnings of the management by manipulating the system. As a result, Sunbeam face bankruptcy. Afterwards, Mr. Dunlap was also fired from Sunbeam in the summer 1998. SEC also try their best that Dunlap and his fellows in fraud scheme can never serve as an officer or executives in any publicly traded companies so they don’t violate any SEC law. SEC find that $62 million of sunbeam’s $189 million income don’t comply with the SEC rules. In 1997, SEC finds out that Sunbeam after Dunlap was created as a cookie jar reserve that only shows fake profits. It was pretty surprising that how Dunlap decrease the COGS of the inventory which shows huge profits when sold. In addition, Fake sales were created to show profit. Even though the auditor Harlow pointed those sales to Sunbeam corporation management, but they did not pay attention to