HealthSouth Case Flashcards
What is HealthSouth?
A chain of hospitals and rehabilitation centers
What were HealthSouth’s stock prices like?
They were increasing by 31% each year
Who was the CEO of HealthSouth?
Richard Scrushy
What was causing HealthSouth’s stock prices to significantly increase?
Richard Scrushy and several other company financial executives had been engaging in accounting fraud
What type of earnings management did HealthSouth use?
Fraud
How did HealthSouth commit fraud?
They purposely overstated and lied about their numbers
How many financial executives were federally charged in the HealthSouth case?
15
Was Richard Scrushy ever federally charged in the HealthSouth case?
No, he was acquitted of all 36 federal charges
What was Richard Scrushy convicted of in federal court?
Bribing an official
What was the ethical dilemma in the HealthSouth Case?
Should the HealthSouth executives listen to Scruchy and commit accounting fraud by fixing their numbers?
