Summary Of Aaer No. 1579 On Rite Aid's Fraud

Subject:AAER on Financial Statement Fraud by ceremony charge AAER No. 1579 on June 21, 2002 discloses to the public the irregulars orders to ritual countenance due to their fraudulent activity. process guardianships reported financial statements were false and misleading, and its books and records were inaccurate. rite serve was ordered to restate reported cumulative pre-tax income by a total of $2.3 billion and cumulative net income by $1.6 billion. religious rite wait on was also ordered to cease-and-desist pursuant to contribution 21C of the Securities and transmute Act of 1934 from committing or causation any violation, and from committing or causing any future violation, of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. This special(prenominal) AAER does non disclose the specific facts that caused the SEC investigation, but it is my understanding that rite maintenance was being investigated due to dis agreements with its auditor, KPMG, and its suspicious severance gather up granting millions of dollars that were given to employees to keep them quiet over sacrament Aids fraud. Soon after the SEC investigated Rite Aid, they spread abroad a number of violations by Rite Aid. Rite Aid failed to disclose improper vendor deductions or up charges. Rite Aid failed to accrue expenses for Stock Appreciation Rights (SARs).

Previously spare expenses were change to overstate income. Gross profit entries were made to cut back COGS and A/P. Rite Aid was also guilty of unrevealed markdowns and creating vendor rebates to hide its gross profit entries. ! A judicial proceeding settlement was also prematurely recognized to boost revenues. Rite Aid had been capitalizing expenses for new sites for their stores. However, they did not write-off the expenses when they had a on the spur of the moment deal and did not build a new store. Instead, they go along to capitalize the expenses. Rite Aid also reversed will-call payables as revenue. These were supposed to be payables to insurance companies for prescriptions that...If you want to encounter a full essay, order it on our website: OrderCustomPaper.com

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