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Description
Research and summarize your findings of
a significant accounting scandal that has taken place in the past 5 years . Use
a public firm that is either on the S & P 500 stock index, or was on the
index. Write 4-6 pages with the major findings; focus on accounting or
accounting fraud. Use APA format, include citations and references. Use
spell check and grammarily.
Accounting fraud
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Accounting fraud
The
article is a description of how Apple Company was held accountable for the
financial fraud that occasioned executives through providing misleading information
concerning the company’s iPhone brand (Campbell, 2019). According to the
article, the misleading information about iPhone's performance in china market
was aired on November 2, 2018, but it was noticed when it had lasted for about
two months in January 2019, and a lawsuit was open immediately accusing Apple
company of involvement in fraudulent activities. The material for the force
information a day just after the company reported the annual earnings of the
2018 fourth quarter on November 1, 2018.
Among
the list of the culprit are CFO Luca Maestri and the Apple Company CEO Tim
Cook, who was accused of spreading misleading information about the iPhone
Apple brand performance in the Chinese. In their statement, the two defendants
informed the company and its stakeholders that iPhone is performing well in the
Chinese, but that was not the case. The company used the false information
provided by unscrupulous individuals to make company sales predictions for 2019
and beyond. Based on the information
presented to the management by the fraudsters, the management also increased
the commodity price to fetch high revenue since they thought iPhone was doing marvelous
in China. In the same vein, the company’s stock price team relied on the same
false information to skyrocket the last quarter calendar of 2018 (Abdulmanova et al., 2020). iPhone Chinese
customers noticed an enormous price increase without justification for the
change after the firm released a guidance revision in January 2019. Mane
Chinese customers for iPhone buyers refrained from buying the product, and
consequently, the company realized a substantial loss on sale revenue.
The skyrocketing the iPhone price to the point of making revenue loss was a violation of federal security rules and laws. The deterioration in Apple Company performance in iPhone translated to reduce divined among the firm’s stakeholders. Upon learning the change in performance, the City Roseville Employees' Retirement System to a step of filing in case of action lodge with the United States District for the Northern District of California. The filing of the case District Court was filed on behalf of all the Apple Stakeholders seeking relief for violating federal security laws. Allegation informed that on November 2, 2018, during an ensuing conference call, the company CEO, Mr. Cook colluded with Maestri to cap the company's fourth fiscal quarter report, which they did and reiterated record-keeping guidance for significant holiday quarter (Dimitriadis et al., 2019). The two’s action facilitated the pegging guidance to fall between $89 billion to $93 billion. During the case hearing, Maestri's quote of what Maestri said during the pegging of the guidance was quoted., "it is the guidance lineup that we have even had, '' Maestri said at the time, as renowned in the criticism. “And our regulation range, by the way, represents a new all-time quarterly revenue record. In the first quarter of 2019, Apple company experienced a downturn of 15% from the sale of the iPhone in china compared to its sale proceeds in the 2018 fourth quarter. After the 15% decline in...
