Leslie Fay

The Leslie Fay Companies (Leslie Fay) was a designer specializing in womens stylish dresses. The partnership was run by Fred Pomerantz and subsequently by his son, John Pomerantz. both Pomerantz men were known for their lavish lifestyles and overbearing personalities. Fred had hired capital of Minnesota Polishan right out of college in 1969 to join the accounting module at Leslie Fay. Polishan would later go on to become the familiaritys CFO. Polishan, as it seemed, had an even more overbearing personality than either of the Pomerantz men. The personalities and attitudes of these three men would bring about a huge fraud scandal for Leslie Fay, resulting in a Chapter 11 bankruptcy filing in April 1993 (Knapp, 2011). Leslie Fays income was determined to be overstated $80 million over a percentage point of just three years, 1990-1992. The overstatement of income was the result of over $cxxx million of fraudulent accounting transactions. Inventory was the main central point of the Leslie Fay fraudulent activities. The fraud included inflating the number of dresses fabricate each quarter, creating fraudulent account tags, and overstating inventory by creating in-transit inventory shipments that didnt exist. The fraud extended beyond inventory, however.

Recording gain sales, not accruing expenses, not writing off bad debt, and not recording discounts on receivables were also amongst the fraudulent entries (Knapp, 2011). The end goal of the accounting manipulation was to maintain historical financial ratios formally reported by the company. The problem with maintaining the ratios was that it would have not been economically feasible to maintain them in the economy that was present during that time. not only were women starting to dress more casually, and therefore not desire Leslie Fays product line any longer, precisely retailers were also no longer interested in acquire the companys line. The retailers described Leslie Fays product as outdated, overpriced, and drab. The... If you want to get a full essay, order it on our website: Orderessay

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