ETHICS AND FINANCIAL SERVICES Essay Example | Topics and Well Written Essays - 1250 words

ETHICS AND FINANCIAL SERVICES - Essay ExampleDuring this era, some of its techniques were quite confusing and blatant. The high society had excluded some of its expenses from its fiscal book. The fictitious character highlights various red flags such as an extreme growth-oriented management team and growing need for extra capital. With this, the auditors allowed themselves to be misled and missed the red flags that could have alerted them to compass and analyse their analysis more deeply.During the era 1990-1994, the company was involved in a fraud scheme whereby Gottlieb and Drabinsky received $7, 000, 000 directly or through the company owned by Gottlieb. Approximately $ 4, 000, 000 of the total amount was capitalized as the pre-production costs. Gottlieb and Drabinsky operated a kickback scheme with Livent vendors and took the mentioned amount from the company and took into their own pocket. To fully convince the company of the transaction, Gottlieb instructed the devil vendor s to present an invoice that could not expose their deal. After Livent agreeing to the deal, Gottlieb and Drabinsky received the payment for bogus services. In the mid 1990s, it became difficult for the company to attain its financial goals. Gottlieb and Drabinsky enjoyed their financial gain, and in turn, the company had to bear the loss. It became difficult for the company to raise additional capital to sustain its operation. Further, Gottlieb and Drabinsky manipulated the company by directing Livents accounting stave to obscure the companys financial crisis. Some of the manipulations included erasing the accounting records that recorded the liabilities and expenses of the company at the end of each year.The Livents accounting provide engaged into an accounting scam of transferring the preproduction costs of existing show to shows that was in production. This transfer manipulated the company to comprehend the cost of the major items used in production. To turn out the costs of