Kericu’s case, the CEO is guilty of the offense of violations in financial documentation alteration

From the Kericu’s case, the CEO is guilty of the offense of violations in financial documentation alteration.  The report reveals that the company was experiencing tough financial situations. However, only a few of the organization employees knew about it. As a result, the CEO decided to act underground to retain the image of the company to the stakeholders. Kericu Company is a well defined telecommunications hardware developer. The company was at the verge of shutting down and this did not please the CEO. Since Rodger Lewis has exceptional skills in computer, he decided to make use of these skills to alter the quarterly statements with the aim of boosting the company’s earnings.  Excellent computer skills gave an added advantage to Lewis who could alter the accounting documents without leaving behind a trace.Accounting scandals have been on the rise in the recent years.

These scandals involve the engagement of organizational executives in disclosure misdeeds. The executives are in trusted, and this makes them go unsuspected.  Kericu’s act of accounting fraud is among others that have prompted the Securities and Exchange Commission or SEC to launch an investigation.  Like most of the affected companies, top executives in most of these companies accelerate expected expenses accounting, participate in transactions off balance sheet to make company profitability appear temporarily higher. This is done with the intention of increasing the share price.The Sarbanes-Oxley Act is responsible for accounting changes in companies owing to numerous accounting scandals. The intention of the act is to have companies’ top executives and CFOs to have their seal of approval on their company’s reports. This act also defines fines and jail terms for company executives who sign-off suitability of their financial statements willing and knowing misstatements (Hecht, 2002).

References

Hecht, C., (2002). SEC Central. Retrieved from http://accounting.smartpros.com/x34948.xml

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