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Livent Accounting Scandal
Transcript of Livent Accounting Scandal
hits like The Phantom of the Opera. The Livent Company income and sales went downhill in 1997. The co-founders of Livent, Garth Drabinsky and Myron Gottlieb, had accounting practices that were fraudulent. In 2002 they were caught for defrauding investors of 500 million dollars. Drabinsky and Gottlieb made it seem as if they were making a profit even though the Livent company wasn't. Mike Orvitz, the former Disney executive, invested about millions of dollars in the business and was shocked that Drabinsky and Gottlieb defrauded him out of millions. Marina Messina, the chief financial officer, disclosed the company's long-time accounting fraud. Her job was on the line for this crime and she was later fired as well because she knew exactly what was happening but didn’t put a stop to it as soon as possible. Robert Webster is one of the bosses and investors of Livent who knew about the fraud first. He and Mike Orvitz took over the Livent business in May 2002 after he lost his fortune that was invested in the business. The KPMG accounting firm was baffled by the crimes that were happening within the KPMG accounting firm. They were tricked about the money coming into the company and realized the Livent business wasn’t making any money. If any cases like this were to take place again they should have auditors come checkup on the accounts to see if everything is going smoothly. The government can force all companies to have segregation of duties so each individual can be in charge of separate parts of the accounting firm to avoid fraud. Today the Livent industry has branched out its industry to popular theatres such as Cineplex Odeon which is famous for their movies. Now Livent is making much more than they were before in sales. THE END