You will select some current situation in the business world involving fraud. Business periodicals...

Question

You will select some current situation in the business world involving fraud. Business periodicals and newspapers are full of such situations. In the paper, you will describe the fraud (who, what, where, how, etc.) and apply concepts discussed in the class to this analysis. Most importantly, you will discuss how the fraud was conceived, how it might have been prevented and what recommendations you would give to the organization so it won’t happen again. The paper should be double-spaced and about three to four pages

Nitish · Accepted Answer

Brief Introduction about fraud case:
Celadon Group Inc. is a Delaware company which is having headquartered at Indianapolis, Indiana. The company is one of the largest truckload freight operators in North America and was offering his services in the United States, Canada and Mexico. The company through its one of the subsidiary Quality Companies LLC was in the business of leasing of truck to owners and operators. The company became one of the largest truck operators in the country in few years. The company became owner of more than 11,000 trucks in year 2016 whereas in year 2013 the company was having only 750 truck and tractors. The company had not disclosed impairment loss of $20 million on account of old trucks fleet and the auditor of the company withdrew his opinion for the year ended June 30, 2016 and two next fiscal quarters.
Facts and consequences of the case:
In the case, the company owned more than 11,000 trucks through its own and its subsidiary company i.e. Quality Companies LLC. The transportation sector is having high maintenance cost for old trucks and the company adopted different strategy and to avoid high maintenance cost it started to buy more new trucks and became owner of more than 11,000 trucks. In mid - 2016, the company faced a great issue i.e. the net book value of many trucks was much higher than the market/ disposable value of trucks. If the company would have sold these trucks in open market, then it would have recognized huge impairment losses in the financial statements. 
The company entered into an agreement with another company i.e. truck dealer (Party “ABC”) to buy his truck at inflated book value. The company sold these trucks at very higher value than the market value and recognized handsome amount of gain on sale of junk trucks.

You will select some current situation in the business world involving fraud. Business periodicals and newspapers are full of such situations. In the paper, you will describe the fraud (who, what,...

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