Phar-Mar Inc. Accounting Scandal

Summary Phar-Mor, Inc. was a deep-discount store that had substantial growth in a short period of time. It started with 15 stores and grew to over 310 stores in thirty two states between 1985 and 1992. At first Phar-Mor was seen as a major prospect in the retail market. With sales of over $3 billion and growing, Phar-Mors success even crazy some of the biggest retail giant, including Wal-mart. The president, founder, and COO of Phar-Mor was Mickey Monus, who became quite high-spirited with his money as Phar-Mor grew. The key to the companys success was exponent buying a phrase coined by Mr. Monus, it was a make out of stocking up on products when suppliers where offering rock-bottom prices. After exploitation this power buying strategy Phar-Mor thusly sold the products at deep discounts, beating any competitors prices. This practice was and then a key practice that attracted many price conscious(p) consumers and led to the companys rapid success. However, the deep discount prices where so low that eventually Phar-Mor was no longer able to crook up a profit. In fact, it is believed that there were no acquire generated after 1987.

This is how the problem began, because Monus and other executives did not extremity the rectitude about there losses to damage the success and kind reputation of Phar-Mor, they began to use imaginative accounting practices to hide their losses on the financial statements. Phar-Mors cover up and fraud was in truth extensive and went on for many years without being uncovered. In fact, Phar-Mor was deemed a hot commodity and attracted many large investors. These investors were hot to invest and willingly forked over more then $1.14 billion for further growth. These investors included some big name calling such as Westinghouse, Sears Roebuck & Co., Edward J. De Bartolo, and Lazard Freres & Co. The fraud was extensive and involved document overstatements, misappropriation of assets, and fraudulent financial reporting. The interesting thing was... If you want to get a full essay, order it on our website: Orderessay

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