The HealthSouth Corporation Scandal

Paper Summary:

The paper discusses one of the most publicized corporate ethical scandals in recent memory, the HealthSouth Corporation's accounting misdeeds. The paper reveals that over the course of the company's six-year financial fraud, the company recorded 2.7 billion dollars in fake revenues upon its ledgers. The paper highlights the warning signs of illegal activity in the corporation. The paper explains how the fraud continued because no one was willing to reveal the extent of the crimes that were being perpetuated.

From the Paper:

"How could this go on for so long, with no one the wiser, or at least, with no one willing to reveal the extent of the crimes that were being perpetuated? The corporate climate at HealthSouth that fostered such illegal activities also created a climate of secrecy and fear amongst the criminals. Breathing a hint of dissent was considered to be a betrayal, not an ethical qualm. The major actors, even those who were friends, lived in a constant atmosphere of suspicion, fear and intimidation. One of CFOs who eventually agreed to inform upon the CEO of the corporation said he was threatened that he would become the 'fall guy' should the company's activities come to light when he wished to quit."

Sample of Sources Used:

• Stuart, Alix Nyberg. (2005) "Keeping secrets: how five CFOs cooked the books at HealthSouth." CFO Magazine.

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