HealthSouth Accounting Scandal

HealthSouth Accounting Scandal
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HealthSouth Accounting Scandal
The HealthSouth accounting scandal was facilitated by some internal factors that had been in play for a long time without the knowledge of a majority of shareholders and the public in general. As revealed by Freudenheim (2003) in The New York Times, the corporation manipulated its financial results in an attempt to mislead investors and hide the fact that revenue was plummeting. Also, the CEO had vested interests in the corporations’ stock and had to protect his earnings.
The issues that led to the scandal stemmed from the function of the healthcare organization. The CEO had focused on the healthcare industry so that he could make profits from Medicare reimbursement. However, the company did not perform as expected, and fraud was committed in an attempt to meet the expectations of analysts (Solomon, Carrns, & Terhune, 2003). The expectations were also projected based on the function of the company since it was being classified with other firms that perform the same function.
In light of the consequences of abuse of power demonstrated by HealthSouth CEO, ...