Essay About Livent Inc Case Study And Internal Control

Livent Inc Case Study
Danning ShenProfessor Kevin BellBUSI-710-OL11th Oct 2016Case Study 2: LiventAs the Broadway giant, Livent, Inc simply ruin the enterprises future by a suicide way. Livent, Inc has done a mess, whether it is internal control or external control. When Robert Webster took over the companys audit work, Livent, Incs management and audit teams cannot stop already. They have made a great mistake, waiting for their only legal trial. When the wrong financial statements can no longer be provided to an enterprise senior managers an accurate data, the administrator has been unable to make the right decisions based on existing data, and corporate financial problems have gradually emerged a vicious circle. Although the management of the accounting team through the control of foreign desperately trying to cover up their financial profit and loss situation, but intensified and irreversible financial loopholes in the emergence of management is certainly not willing to see the disaster. Therefore, the biggest mistake of Livent, Inc is to give their own illegal first set a precedent for the enterprise, with financial fraud to cover mismanagement is like a person with drugs to relax. To sum up, Livent, Incs weakest internal control and external control link is the early Messina team is responsible for the companys financial management. An immature accounting team and a high salary temptation of the leaders, they are firmly in control of high-level management, failed to do their due duties. The CFO of an enterprise should report the financial report to the CEO and the audit committee at the same time. From the information in the article, Messina, as CFO, not only failed to help guide the board of directors to make correct and efficient decision-making (internal control), but also did not accurately report to the audit committee on corporate finance (external control). Thus, we cannot ignore the accounting team in the importance of corporate governance. This will also affect the effectiveness of the companys internal controls and external controls. Livent, Inc.s management style is more like authoritarianism, Messinas accounting team is more like Drabinskys immediate team. There is no mechanism for mutual scrutiny in the internal audit of the company (including the internal board), which I think is the biggest management loophole in the scandal.