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Starting at 11:10 AM Where do we go from here!

Starting at 11:10 AM Where do we go from here!. Starting Ariel, George and Ken - Information in “Get Rich Quick!” was based in part on the New York Times article, Flavors of Fraud , by Paul Krugman – used with permission from IIA. Get Rich Quick! With Your Own Ice Cream Business.

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Starting at 11:10 AM Where do we go from here!

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  1. Starting at 11:10 AM Where do we go from here! Starting Ariel, George and Ken - Information in “Get Rich Quick!” was based in part on the New York Times article, Flavors of Fraud, by Paul Krugman – used with permission from IIA.

  2. Get Rich Quick!With Your Own Ice Cream Business Ask about stock options

  3. Ethyl Enron’s Ice Cream Emporium • Sign contracts to provide an ice cream cone a day for 30 years. • Underestimate costs - a lot. • Book all projected profits on future sales You are very profitable! Sell stock.

  4. Dynegy’s Double Dip Delights • Ice cream isn’t profitable – so convince investors it will be • Buy - and sell - 100 cones/day from & to a friend (don’t bother with delivery…) Sales volume shows you will be a big player in the ice cream industry – Issue stock now!

  5. WorldCom’s 31 Flavors • Pretend that operating expenses - chocolate and vanilla - are part of the purchase price of a new refrigerator. Without short-term expenses, you look profitable – Your stock goes up!

  6. ImClone’s Ice Cream Cones Bad vanilla? • Quick! Sell your stock. • Next, tell friends to sell. • Eventually, tell others.

  7. Auntie Adelphia’s Cones and Shakes • Get investors to focus on volume of contracts rather than profits. • Invent imaginary customers. (You don’t even need sales!) Analysts say your stock is a buy!

  8. Tyco’s Tasty Treats We’ll pretend to deliver the ice cream to Alaska. You’re “out of state” - No sales tax!

  9. Dick has 1 scoop. Jane has 1 scoop. How many scoops do Dick and Jane have? The New Math

  10. Starting at 11:10 AM Where do we go from here! Starting Ariel, George and Ken - Information in “Get Rich Quick!” was based in part on the New York Times article, Flavors of Fraud, by Paul Krugman – used with permission from IIA.

  11. The New Math 1. Count vanilla cones. 2. While auditors count chocolate, move vanilla and re-label. 3. Count “French Vanilla” cones. 4. Repeat.

  12. “Gee, Dad – Can I Get Rich with Ice Cream Too?” Sure, Johnny – • How about a big corporate loan? • We’ll create a special purpose entity! • With ice cream options, we can benefit from inflated prices!

  13. Journal of Accountancy – “In today’s complex business environments, conducting a complete audit by surprise would be a practical impossibility. In CPA’s natural zeal to serve their clients and cause them minimal disruptions, they’ve gradually gotten away from unannounced audit work.”

  14. “all change is preceded by crisis…” Kierkegaard

  15. The Crisis… Five of the seven largest bankruptcies in history followed annual reports with clean audit opinions. Source: Bloomberg

  16. “Cooper told the audit committee of WorldCom's board that the company had been playing dirty with its accounting practices.” - Time Magazine Cynthia Cooper, Coleen Rowley and Sherron Watkins

  17. CRISIS! Dangerous Opportunity

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