Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 15 October 1999
Length: 21 pages
Data source: Published sources
Topics:
Business history; Management; Control systems; Profitability; Fraud; Costing; Equity method; Risk; Risk management; Bonds
Abstract
On April 17, 1994, Kidder, Peabody & Co. announced a $350 million charge against earnings resulting from the discovery of false trading profits. That same day, the termination of Joseph Jett's employment with the company was made public. By illustrating the mechanics of bond accounting, this case describes the trading strategy that led to the creation of false profits. Failures of internal control are also discussed. The case ends by asking who was to blame.
Location:
Other setting(s):
1991-1994
About
Abstract
On April 17, 1994, Kidder, Peabody & Co. announced a $350 million charge against earnings resulting from the discovery of false trading profits. That same day, the termination of Joseph Jett's employment with the company was made public. By illustrating the mechanics of bond accounting, this case describes the trading strategy that led to the creation of false profits. Failures of internal control are also discussed. The case ends by asking who was to blame.
Settings
Location:
Other setting(s):
1991-1994