Divided loyalties related to disclosure and concealment.

Part 1
At the end of chapter 10 on Concealment and Disclosure there is a case involving divided loyalties related to
disclosure and concealment. Below is the text of that case:
Gail works as an auditor for a national accounting firm. One of her clients, Alias Manufacturing Corporation
(AMC), has performed well on the stock market for five years. During her audit, however, Gail discovers that
AMC has unintentionally underreported some of its liabilities and is about to be hit with a major class-action
lawsuit. She projects that AMC stock values may fall by as much as 35 percent within the next six months. One
weekend, Gail drives home to visit her aging parents. As their only child, she feels particularly responsible for
their well-being. Stuck in the lower middle class on a fixed income, they are very excited to inform their
daughter that they have recently invested half of their retirement funds in AMC. Stunned, Gail ponders what to
do next.
There will be no outside citations required. This will be mainly your opinion, but do try and post a carefully

considered opinion. It is definitely a dilemma.

Part 2
Watch the online lecture about HealthSouth, read the two articles posted and then do the following:

1. Do some online research about Richard Scrushy. Based upon your research (and cite at least one source),
   what type of culture do you believe he set up at HealthSouth? Even though he was found not guilty on all
   counts, do you believe he directed the fraud as claimed by his CFOs? Why or why not? What do you see in
   him that makes him you believe him or not believe him?
2. Weston Smith claimed that Scrushy had an explosive temper and managed his executives by intimidation.
   How do you believe you would respond to a boss like that? Explain why you answered the way you did. Can
   you think of any guidance from scripture that would be applicable if you found yourself in that type of situation
   (this is not a yes or no question; I want you to look for such guidance).
   https://www.cfo.com/fraud/2017/03/two-cfos-tell-tale-fraud-healthsouth/
   https://www.fraud-magazine.com/article.aspx?id=4294968446
   Preferred language style Simple (Easy vocabulary, simple grammar constructions)

Sample Solution