World Health Alternatives, Inc. Fraud

In: Business and Management

Submitted By kathi
Words 2938
Pages 12
ACC 655 – Advanced Auditing
Term Paper: World Health Alternatives, INC – Fraud
Brian O’Rourke, Katharina Ryska
10/14/2013

Introduction Scandals like Enron, Worldcom and Tyco have taught society about CEO’s fudging financial statements in order to make some extra money. With millions of dollars lost for the shareholders, members of the management engaging in fraudulent activity face high penalties. However, these penalties do not stop executives from trying to scam the system. World Health Alternatives, Inc got negative press following a big fraud investigation. The company with its number of wholly owned subsidiaries provides “medical, professional, and administrative staffing services to the healthcare industry in the United States.” By comprising nurse and physician staffing one would expect the company to have integrity. This paper is going to look at the fraud case, auditor’s responsibility, financial statements as well as the charges against the auditor. Furthermore, this paper is trying to see if the SEC allegations were warranted against the auditor.
Overview of the Case
According to the SEC, World Health Altneratives, Inc (World Health) engaged in fraudulent and improper conduct from at least May 2003 – August 2005. They manipulated accounting entries by understating expenses and liabilities, which made World Health look more financially sound. According to the SEC Website, “every annual and quarterly report that World Health filed with the Commission contained false financial statements”. Another part of the complaint filed by the SEC was that McDonald caused the company to make misrepresentations and omissions in documents publicly filed concerning financial performance, registration of millions of shares of World Health stock, certain material financial transactions as well as the number of shares authorized and outstanding and the World…...

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