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Organizational Behavior
On August 9, 2005, a special committee comprised of two

On August 9, 2005, a special committee comprised of two independent directors of Krisp Kreme (the Special

Question:

On August 9, 2005, a special committee comprised of two independent directors of Krisp Kreme (the €œSpecial Committee€) presented a report of its investigation into an accounting fraud to the board of directors.

The following numbers were included in the Krispy Kreme Special Committee report with respect to reversals of accruals during the fraud period.

Devise a scenario to explain how and why the Krispy Kreme accruals were made in the amounts that they were. What might have been the motivation for suchaction?

Transcribed Image Text:

Estimated Re statement Adjustments Increase (decrease) in pretax earnings (in millions) Nine FY00 FY FY FY FY Months And ended endedended endedended Accruals relating earlier 1/28/0123/02 22032/1/0410/31/04 Total to emplovee vacation pay (2.0.4(0.5 (0.3(0.50.4) (4.1) Accruals for charitable contributions (0.5) (0.5(07 (1.7)

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Schilits shenanigan number 4 shifting current expenses to a later period ...View the full answer

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Question Posted: Dec 30, 2014 02:35 AM

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