Fraud Examination: Case Study Docurment4 - Word Lauren Reilly File Home nsert De

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Fraud Examination: Case Study

Docurment4 - Word Lauren Reilly File Home nsert Design LayoutRefererces Mailings Review View Format Tell me whet you went to do Share In April 1997, Bre-X Minerals, a Canadian company, was supposedly one of the most valuable companies in the world. Bre-X had convinced numerous mining experts that they had rights to one of the largest gold deposits ever discovered. It was hailed as the mining find of the century The gold mine, located on a remote island in the East Kalimantan Province of Indonesia supposedly had so much gold that the actual price of gold on the open market dropped significantly due to the anticipation of an increased gold supply. Within a few months, thousands of Canadians-big-time investors, pension and mutual fund, managers and many small investors, including factory workers-got caught up in "Bre-X fever." The company's stock price shot from pennies to more than $250 per share before a 10-for-1 stock split was announced Thousands of investors believed they were on the verge of becoming millionaires The story took a sudden turn for the worse when Michael de Guzman, Bre-X's chief geologist and one of only a handful of company insiders entrusted with the mine's core samples, apparently committed suicide by jumping out the back of a helicopter. Guzman's suicide was reported around the time that an independent consulting firm reported that samples from the mine had been tampered with. The firm concluded that the core samples were made to appear to be rich in gold by adding a relatively small amount of gold to the samples. In essence, the firm concluded that Bre-X was a scam of epic proportions! The gold mine, located on a remote isiand inthe East Kaim My Text by Chegg Fraud Examinatic 5th Edition View all sol PERCENT INDUS CHANGE AVERA LIQUIDITY RATIOS Current ratio (current assets/current liabilities) 12/31/15 CHANGE Chegg riaht n 1.21 Page 1 of 2 0 words 12:51 PM 119/2017

Explanation / Answer

1.)

By investigating management and directors can help to determine the value of Bre-X’s gold prospects to show the correct value of the company. As they are the part of management and management is the backbone of any successful company. This is not to say that employees are not also important, but it is management that ultimately makes the strategic decisions. You can think of management as the captain of a ship. While not physically driving the boat, he or she directs others to look after all the factors that ensure a safe trip.

2.)

By investigating the company’s relationships with other entities help determine the value of Bre-X’s gold prospects as for the company seeks to outperform our competition fairly and honestly. Stealing confidential or proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is strictly prohibited.

All Racker should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair dealing practice.

In this way where the management of a publicly traded company is charge of creating value for shareholders. Management is to have the business smarts to run a company in the interest of the owners. Of course, it is unrealistic to believe that management only thinks about the shareholders. Managers are people too and are, like anybody else looking for personal gains.

3.)

By investigating the organization and its industry help determine the value of the company. The Bre-X Minerals case provided false information that became detrimental to investors. The false information that harmed investors led to the analysis of how investigating management and directors would help in the determination of the company’s value of gold prospects. This also led to the ways in which investigating the company's relationship with other entities, the organization and its industry and the ways the financial results and operating characteristics help determine the value of Bre-X fold prospect. In addition an examination of perpetrators motivations to commit fraud was evaluated.

4.)

  By investigating the financial results and operating characteristics help determine the value of Bre-X’s gold prospects.

Here the management plays a vital and important role in a business. However if management is involved in fraudulent activities management can cause more harm than good. In the Bre-X Minerals case, investigating management along with other directors would have revealed a lot about the company's standing.

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