[SOLVED] After graduating from West Virginia University in

After graduating from West Virginia University in 1984 with a degree in accounting and finance, Gregory Podlucky decided to work with his father Gabriel, who had a small business empire in western Pennsylvania. 1 The senior Podlucky’s business interests included a chain of auto parts stores, an ethanol fuel company, several real estate properties, and, most notably, the Jones Brewing Co., which is best known for its line of beers sold under the “Stoney’s” brand name. In 1989, Gregory Podlucky decided to strike out on his own. Podlucky used the funds he obtainedfrom cashing out his ownership interest in his father’s businesses to establish a water bottling venture in LaTrobe, Pennsylvania, the hometown of golfing great Arnold Palmer. In 1992, the entrepreneur and former CPA expanded his product line to include a wide range of flavored water, fruit, and tea drinks. Despite competing in the hypercompetitive beverage industry, Podlucky’s company, which he ultimately named Le-Nature’s Inc., grew rapidly. By 2006, the company was the 33rd largest beverage producer in the United States with annual reported sales approaching $290 million and a workforce of several hundred employees. One year earlier, an investment group had offered Podlucky $1.2 billion for Le-Nature’s, an offer he rejected. Instead of selling out, Podlucky decided to take his company public. Unfortunately for Podlucky, his fellow investors, and his company’s many creditors, that dream was never realized.
Strategic Financing
Podlucky served as Le-Nature’s chief executive officer (CEO) and relied principally on his family and wide circle of friends and business associates to staff the company’s other key positions as it expanded over the years. He hired his brother, Jonathan, to serve as Le-Nature’s chief operating officer (COO) and placed his 22-year-old son Jesse in charge of the day-to-day accounting for Le-Nature’s large subsidiary that produced bottled tea products. Among the friends that he appointed to management positions at Le-Nature’s was Robert Lynn, who had multiple titles over the years with the company including executive vice president of sales. Despite serving as Le-Nature’s CEO, Gregory Podlucky was also heavily involved in the company’s “routine accounting functions.” 2 “Director of Accounting” was the title held by the organization’s chief accountant, a position occupied by Tammy Andreycak, another close friend of Podlucky. Andreycak was a single mother who did not have a college degree or formal training in accounting. According to company insiders, her primary role within Le-Nature’s was serving as Podlucky’s confidante. When dealing with third parties, Podlucky often referred to Andreycak as his “secretary.” A common nemesis of a rapidly growing small company is a shortage of capital. Gregory Podlucky relied on different strategies to finance his company’s expanding operations. During the 14 years that he served as Le-Nature’s CEO, the articulate and outgoing Podlucky raised almost $1 billion of debt and equity capital for the company. In 1999, Podlucky retained a financial consulting firm to identify potential investors for Le-Nature’s. In 2000 and 2002, that consulting ………………………

1. Identify the parties impacted by the quality and rigor of an organization’s corporate governance. What responsibilities do corporate executives have to those parties?
2. Identify and describe the corporate governance-related responsibilities of corporate accountants, independent auditors, and external accountants hired by companies to perform forensic investigations.
3. Identify the apparent flaws in Le-Nature’s corporate governance. Relate those flaws to the five components of the COSO internal control framework and the “fraud triangle.”
4. Le-Nature’s was not a SEC registrant. Identify corporate governance safeguards imposed on SEC registrants that are not imposed on non-SEC registrants.
5. Following the Special Committee investigation in late 2003, Le-Nature’s dismissed EY and retained BDO Seidman to serve as its independent audit firm. Whatsafeguards are in place to mitigate the impact of auditor changes on the credibility and integrity of the independent audit function?
6. Identify the key differences between a “quarterly review” and an “annual audit” performed by an organization’s independent auditors.
7. Pascarella & Wiker was retained by K & L Gates to assist in the fraud investigation requested by Le-Nature’s Special Committee. What type of professional service was Pascarella & Wiker providing? What professional standards governed Pascarella & Wiker’s conduct during the provision of that service?

Question: After graduating from West Virginia University in