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The article that I chose to use for this assignment is called Parma splat Jan 15th 2004 From the Economist print edition retrieved May 13 2005 The article concerns the Parmalat company which was found to have been lying on their financial statements claiming there was more income than debt They also were able to get the Bank of Italy a part of Bank of America to provide a forged and false letter confirming that Bonlat a Parmalat subsidiary based in the Cayman Islands had deposits of close to 4 Billion 55 Billion with the bank The chief financial officer ten other people including the CFOs wife were arrested and told prosecutors that he the CFO benefited personally from funds held by subsidiaries in Luxembourg and he has alleged that the company took kickbacks from the Swedish packaging group Tetra-Pak the Swedish company has denied all allegations While reading through this article it struck me that the problems of unethical financial management are not unique to the United States as I tended to believe Parmalat an Italian based business had some of the same problems as Enron and Worldcom when it came to managing finances The Chairman and Chief Executive Officer CEO of Parmalat was the same person and the non-executive directors on the board had no independence to act on the various issues faced by the company Parmalat apparently had a board that had more family members on it as well as friends of the family and few people that were independent of both It seems to me that this would cause a conflict of interest when making sure shareholders were treated fairly According to the article Until 1999 Grant Thornton an international network of accounting firms was Parmalats main auditor But Italys rules on the mandatory rotation of auditing firms at regular intervals forced the group to switch that year to Deloitte Touche on of the big four global accounting firms
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