Pepsico

Paper Summary:

Discusses fraud at PepsiCo. Problem of foreign managers of this international organization overstating their financial position, and using inappropriate accounting practices. Actions taken by company managers. Discovery of the fraud. Use of the internal audit. International operations. Analysis of the company's 1982 Annual Report, the time of the financial scandal.

From the Paper:

"Introduction
PepsiCo had a serious problem that came to light in 1982, but which dated back to the late 1970s. An international organization, some of PepsiCo's foreign managers were overstating their financial position and using inappropriate accounting practices to cover their divisions' actual performances. While the scope of the problem was small relative to the performance of the company as a whole, it nonetheless garnered headlines around the world and called into question the management at PepsiCo. The company took immediate action when the problems came to light in that the people involved were dismissed and replaced, but the company's reputation suffered and employees were also left questioning how a global company which should have had protections in place could have been vulnerable to such a scheme. This research considers the ..."

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