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Procomp Informatic: Stepping on Ethical Landmines in Asia    
 
Product Ref: 07/327C Company: Procomp Informatic Ltd

Product Type: Case Industry: Semiconductors

Related Product(s): Teaching Note
Authors: Amy Lau   Claudia H L Woo
The collapse of Procomp Informatics Ltd, a major Taiwanese chipmaker, has been regarded by Taiwanˇ¦s market watchdogs as similar to the scandal of the US energy giant Enron in 2001. In June 2004, Procomp defaulted on a bond payment and structured for bankruptcy, despite a huge cash balance recorded in its books. It was discovered that the companyˇ¦s executives and its overseas sales agents had colluded in overstating sales revenue, manipulating stock prices, illegally leveraging assets and arranging bonds through paper companies. The incident left thousands of company shareholders with massive financial losses. The case has raised concerns about corporate governance and risk management of public companies in Taiwan. It has called into question the credibility of the financial reporting process, companiesˇ¦ internal controls and corporate ethics in the Asian context.
Functional Area : Accounting & Control
Social Enterprises & Ethics

Issues: Accounting Fraud and Professional Ethics in Taiwan, Business Ethics, Financial Reporting, Accounting Fraud, Corporate Governance, Cultural Influence, Risk Management
Length: Text: 18 pages
Exhibits: 0 pages
Country: Taiwan

Pub. Year: 2007 Level of Difficulty: 3
         
This product type is available in the following language(s):      English   Simplified Chinese
         
Related Information: N/A
 
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