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Essay / Research Paper Abstract
This 5-page paper discusses how Phar-Mor was fraudulent with its accounting. "Ghost inventory" is discussed as well. Bibliography lists 3 sources.
Page Count:
5 pages (~225 words per page)
File: MTpharmora.rtf
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Unformatted sample text from the term paper:
was Phar-Mor. The retail druggist and pharmacy made headlines in early 1990s when it was learned that Phar-Mors executives had cooked the books to the tune of $500 million. The
company ultimately went into bankruptcy, and when it emerged from there, was bought out by a rival chain. As with many
cases of this type, there are generally warning signs along the way that point out there could be some problems with some numbers. Certainly a 1996 jury thought so -
it found the companys auditors Coopers & Lybrand liable under a fraud claim (Cotrell and Glover, 1997). Describe the failure and causes of the failure. Were there missed opportunities
to correct the failure? What losses resulted? Between 1985 and 199s, Phar-Mor became the darling of Wall Street, growing from
just 15 stores to 310, operating in 32 states, and showing sales of more than $3 billion (Cotrell and Glover, 1997). Under its hard-driving leader Mickey Monus, it seemed as
though this company could do no wrong. But in 1992, the gig was up, as it was found that the profits were
a fraud, which had been carried out over several years by people at many levels of the organization (Cotrell and Glover, 1997). Falsifying inventory was one way in which the
company managed to bolster its income statements and asset count when the company was actually running out of money. The fraud went
on for three to six years - and it was questioned why auditor Coopers & Lybrand hadnt caught any wrongdoing (Cotrell and Glover, 1997). What should have raised a red
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