Case Study Cendant Corporation, One Of The Worlds...

Cendant Corporation, one of the world’s largest hotel and real estate franchises was known as the largest accounting fraud before Enron. Cendant Corporation was created in 1997 when Hospitality Franchise Systems (HFS), Inc. merged with Comp-U-Card international (CUC). Chairman Walter Forbes and Vice-chairman Kirk Shelton were the perpetrators to a decade long accounting and securities fraud. The day after Cendant exposed evidence of accounting irregularities the corporations stock and convertible bonds lost nearly $14 Billion (Morgenson, 2004). This paper will address the issues that went wrong with Cendant and how the crimes fit into to Friedrichs’ typologies. It all started with Walter Forbes when he created a company in the 1970’s known as Comp-U-Card (CUC), an online shopping delivery service. Since the Internet and online shopping was so new, Forbes was worried he wouldn’t get a return on his investment. It wasn’t until the early 1980’s when CUC started taking off. In the early 1990’s after preparing a report on CUC, Robert L Renck Jr., a securities analyst on Wall Street advised investors to sell their CUC stock. Renck was shocked at the company’s profitability and the gaps in the reports CUC gave to its shareholders (Henriques, 1998). The company responded by blackmailing Renck from future meetings and taking him off their mailing list. In 1997 CUC and HSF merged to form what is now referred to as Cendant, which included brands such as Coldwell Banker, Ramada,Show MoreRelatedExploring Corporate Strategy - Case164366 Words   |  658 Pages 22/10/2007 11:54 Page 597 CASE STUDIES ECS8C_C01.qxd 22/10/2007 11:54 Page 598 ECS8C_C01.qxd 22/10/2007 11:54 Page 599 Guide to using the case studies The main text of this book includes 87 short illustrations and 15 case examples which have been chosen to enlarge speciï ¬ c issues in the text and/or provide practical examples of how business and public sector organisations are managing strategic issues. The case studies which follow allow the reader to extendRead MoreContemporary Issues in Management Accounting211377 Words   |  846 Pagesendeavour. But personal though his achievements may be, they are also reflective of a wider tradition of significant involvement in the practical sphere by senior British accounting academics. For we must remember that it was Professor Edward Stamp who was one of the first to call the British audit profession to account with his questioning of ‘who shall audit the auditors?’ The subsequent institutional response has most likely gained as much from the likes of Professors Harold Edey, Bryan Carsberg, Ken Peasnell