Fortex Scandal

Assignment 1: Scandals in Auditing Fortex Introduction Fortex was regarded as one of upstart Zealands top companies. They used innovative engineering to add value to their product. They won accolades, looked after employees, and paid suppliers well. only if when the company collapsed in March 1994 it was revealed that the success was all establish on false accounting. The management team was able to rag a company of respected auditors as well as everybody else for more than three years. Thousands of people suffered as a result. The Organization, the time, and the get into Fortex was a meat processing company formed when quartet companies merged in 1985. The company was listed on the Stock supersede in 1990. Most of the firms business was slaughtering sheep and lambs in the south island. They also had a venison processing plant in the north island (Securities Commission, 1995).They focused on value added processing. Instead of marketing the carcass whole they would process it further into vacuum jammed cuts of meat. During the early 1990s Fortex was seen as one of New Zealands best companies. They won many awards including 1990 Company of the Year, 1992 Trade New Zealand export award, and a Best Corporate Strategy award (MacLennan, 1996).

Despite winning these awards the company gained a reputation for not achieving financial performance projections and delivering lower returns than other firms on the line of credit exchange (Securities Commission, 1995).The driving force behind Fortex was Grahame Thompson. He had a strong vision for the business and was very ambitious. (MacLennan, 1996) What happened? On 11 March 1994 Fortex announced that they expected a $45 to $50 million 6-monthly expiry. This was a huge surprise because they had reported wampum of $ 4.8 million in 1991, $9.2 million in 1992, and a loss of $4.8 million in 1993. The loss in 1993 could be explained by the 1992 snow storm in the south island having an adverse prepare on supply. The share price... If you want to get a ripe essay, order it on our website: Ordercustompaper.com

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