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CPE session

    Patricia A Johnson
    CPE #4 Fraud and Ethics Resources for Enhancing Student...
    CPE session posted August 12, 2010 by Patricia A Johnson, last edited April 28, 2012 
    1338 Views, 3 Comments
    CPE #4 Fraud and Ethics Resources for Enhancing Student Learning
    leader(s), affiliation(s):
    Patricia Johnson Canisius College
    session description:

    Looking for new resources to incorporate into your introductory or advanced financial accounting courses? Fraud continues to make the headlines and capture student interest. This session will provide you with fraud resources (websites, cases, activities) that can be used at the introductory, intermediate and advanced levels, organized for you.

    July 31, 2010 8:00am - 11:00am


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    • Patricia A Johnson

      Thanks to everyone who attended this session!  You were a great audience.  I hope that you learned something new that you can put to use in your teaching.

    • Robert E Jensen

      "Navistar Sues Its Former Auditor Deloitte & Touche (for audit fraud)," by Andrew Harris, Bloomberg News, April 27, 2011 ---

      Navistar International Corp. (NAV), a maker of medium- and heavy-duty trucks, accused its former auditor Deloitte & Touche LLP of professional malpractice in a lawsuit seeking $500 million in damages.

      Navistar claimed shoddy work by Deloitte & Touche accountants from 2002 to 2005 forced the company to revise its financial statements, according to a 134-page complaint filed today in Illinois state court in Chicago.

      “Deloitte lied to Navistar and, on information and belief, to Deloitte’s other audit clients, as to the competency of its audit and accounting services,” the Warrenville, Illinois-based truck maker alleged in its complaint.

      Deloitte & Touche, based in New York, functioned as an auditor, accountant and adviser to Navistar for almost a century, a relationship that ended in April 2006, according to the complaint.

      Navistar said in April 2006 that its restatements for 2002 through the third quarter of 2005 were related to warranties and product-development programs at suppliers. It also said it was replacing Deloitte with KPMG LLP. The restatements were made in 2007.

      In its complaint today, the truck maker accused its former auditor of fraud, fraudulent concealment, breach of contract and malpractice relating to the advice and auditing services Deloitte gave Navistar.

      Continued in article

      Jensen Comment
      What makes me think that Francine will be dancing on those stiletto heels tonight. She loves to play gotcha with Deloitte.

      Bob Jensen's threads on Deloitte's woes are at

    • Robert E Jensen

      "Jenkins: Wal-Mart Is Not Alone:  An Australian firm encounters New York's notorious labor graft," by Holman W. Jenkins, Jr., The Wall Street Journal, April 27, 2012 ---

      When in Mexico, don't do as the Mexicans do. That was good advice for Wal-Mart, though it perhaps seemed impractical at the time. Now the company is enveloped in allegations that it paid $24 million in bribes to expedite store openings in our southern neighbor.

      Just maybe a little air should leak out of the sanctimony bubble in light of another story this week of corporate innocents blundering around Gomorrah. The Mexican people at the very least are entitled to a twinge of irony.

      In 1999, the Australian giant Lend Lease Group bought a New York construction firm, Bovis, and soon was erecting many modern landmarks, including Citi Field (where the Mets play) and the renovated Grand Central. One thing the Australian company didn't do was upend and purify a 70-year tradition of labor graft in the city's building trades.

      In a settlement announced on Tuesday, the U.S. Justice Department charged that "Bovis intentionally and fraudulently billed clients, from at least 1999 to 2009, for hours that were not worked by labor foremen from Local 79 Mason Tenders District Council of Greater New York."

      A Bovis executive told a judge: "From at least 1999 to 2009, I agreed with others at Bovis to continue the existing practice for laborers at Local 79."

      The company will pay a fine and submit to monitoring. Two executives may face jail terms. But these statements beg an obvious question: What motive would Bovis have for overpaying union workers? Because it was the victim of a labor racket that's been going on in New York for decades and will continue to go on is the obvious answer nowhere alluded to in Justice's lengthy statement.

      About one thing Lend Lease and Justice agree: The illicit practices didn't begin when Lend Lease arrived. They were already entrenched during a period when Justice itself was in control of the Mason Tenders union.

      Justice took over the Mason Tenders in 1995, installing a court-appointed monitor for an initial period of four years, impelled by the testimony of Salvatore "Sammy the Bull" Gravano, the Gambino family underboss who turned on boss John Gotti. Gravano testified that the union, representing unskilled workers, was a mob favorite because the goombahs didn't need special skill or training certifications to qualify for no-show jobs.

      Under trustee Michael Chertoff, the government did much to clean up the city's most mobbed-up union. It halted the looting of the union's pension and benefit funds by another crime family, the Genoveses, under Vincent "the Chin" Gigante, also known as the "Oddfather" for his habit of walking on Sullivan Street in his bathrobe talking to himself (a stratagem to avoid prosecution by feigning incompetence, many presumed).

      What Justice apparently didn't clean up, however, was the practice of extorting no-show payments from builders. In the last year of its trusteeship, the union was raided by the Manhattan district attorney in an attempted crackdown on such scams.

      Graft cultures are hardy for a reason. As much as some arms of government may seek diligently to root them out, others are mobilized to protect them. If you have any doubt, just read former Brooklyn D.A. Burton Turkus's account of the Roosevelt administration's bizarre manipulations to stall New York state's execution of labor racketeer and Murder Inc. chief Louis "Lepke" Buchalter, which the late Turkus attributed to Lepke's connection to labor leaders who were connected to FDR. Of recent vintage is the mystery of Arthur Coia, head of the Laborers' International Union and friend of Bill Clinton, whose pending RICO indictment in 1995 was abruptly dropped, even as one of his constituent unions, the Mason Tenders, was seized by the government.

      Lend Lease has now been paraded for the press, but prosecutors acknowledge that the practices are widespread and continuing. Companies will continue to pay up. The Mason Tenders will remain an important stop for politicians running in the city and state. For all the fulmination, the illegal payments to several dozen union foremen amounted to $19 million over 10 years—a sum to be weighed against tens of thousands of votes represented by building-trades members and their families.

      Ironically, as nonunion builders encroach and compete more successfully in the city, those builders bound by union contracts will be even more pressured to pay union bribes to allow cheaper nonunion workers on site—what this scandal fundamentally was all about.

      Continued in artiicle

      Bob Jensen's Fraud Updates ---