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Auditing to Point Out Red Flags

The CEO of a large corporation was determined to see that an active and effective committee of the Board would perform in an excellent manner. In this stead the CEO, who was also the Chairman of the board, had himself appointed Chairman of the Board audit committee. The CEO asked the board to approve his selection of the other two members. The board approved without discussion his recommendation. The backgrounds on the other two were as follows:

First individual recommended was the CEO of a very large communication company. This individual had been a member of the Board for 7 years.

Second individual recommended was the sole owner of a very successful service company. This individual had been a member of the Board for 1 Year.

Point out those areas that raise a red flag to you?

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Solution Preview

Many areas are red flags. First of all, the CEO appointed himself chariman of the board, when that should have been someone else that is not in such a high and lofty position within the ...

Solution Summary

This solution pointed out areas that are unethical that can go on within an organization.