Phar-Mor

Student’s Name
Professor’s Name
Course
Date
Phar-Mor Company
Mickey Monus’ role and fraud
Mickey Monus was an entrepreneur at Phar-Mor when the retail company was hit by one of the most popular fraud in American history. The Phar-Mor company offered consumption drugs at extremely low prices. Mickey Monus used his entrepreneurial role to perpetrate fraud in the organization. His ability to influence people contributed to him taking part in the fraud. The people he worked with believed that he could do no wrong (“Phar-Mor 53 Minutes -Part-1”). Bankers and investors also had confidence in Mickey Monus and Phar-Mor. They easily trusted Monus and gave him money to invest. However, Monus took advantage of the investors’ trust and perpetrated fraud at Phar-Mor. Questions an investor at Phar-Mor would have wanted answered
If I had invested at Phar-Mor, I would have wanted an answer on why the financial records were not available to the investors. I would also have wanted the financial records scrutinized by an independent auditor. Having the financial records of an organization reviewed by independent professionals ensures transparency.
As an investor at Phar-Mor, I would also have wanted an answer to what happened with the funds that investors paid for exclusivity. Failure by investors to question the use of these funds gave Mickey Monus an opportunity to use the money to cater for the loses that the company had incurred. Questioning the use of the exclusivity fee would have helped investors to discover the true financial status of the company.

Investors in a company have the right to questions whatever happens at the organization.
Clues that accountants/auditors missed
The accountants and auditors at Phar-Mor missed several clues. For instance, they did not know why investors had been charged for exclusivity fees even when it would have been in Phar-Mor’s interests to have many investors. Charging investors for exclusivity fees should have given the accountants and editors a clue that the company’s financial status had challenges. Additionally, the accountant missed the clue of not being able to account for the company’s profits even though there were reports that Phar-Mor was still profitable. The accountant should also have taken a clue when Phar-Mor crossed the company’s disappointing financial report and wrote a profitable figure.
Key ethical issues
The accountants and management team at Phar-Mor faced various ethical issues. For instance, they witnessed Mickey Monus alter the financial statement of the company. They had a choice of informing investors about Monus’ conduct or remaining quiet about it. As the fraud happened, the accountants and management team should have informed the stakeholders and investors. The investors were the owners of Phar-Mor, and they had a right to know how their company was fairing. The accountants and managers were responsible of investigating the correct position of the company and informing the stakeholders.
Additionally, the accountants and the management also had the ethical responsibility of confronting Monus and questioning his actions. The accountants in an organization are supposed to handle the company’s finances and ensure that they are correct and accurate. However, in the case of Phar-Mor, the accountants relegated their responsibility. They allowed an entrepreneur with no accounting expertise to handle the company’s finances. Similarly, the management team was not keen on their oversight responsibility. They should have ensured that everyone in the organization does what they are supposed to do. Therefore, both the accountants and the management team were not ethical in their conduct.

Work Cited
“Phar Mor 53 Minutes -Part-1.” YouTube, gzfraud, 4 Sept. 2011, www.youtube.com/watch?v=XpuzHpTM1uA. Accessed 4 Sept. 2018.