Page 30 - How Not To Cook The Books Article

Finance is both a tool and a weapon in the arsenal of the organisation.
An organisation may have strategic health but if this is not accompanied
with financial health the likelihood of commercial success is severely

curtailed.

Perhaps the evidence points to environmental scanning not taking place
with the result that as the downturn took grip fraud crept in. Would Unwin
have bought Wrekin if he thought there was going to be such a severe
economic turndown? Perhaps YES if the acquisition cost nothing but a

lump of crystal.

Consequently, one must accept that the acquisition of Wrekin was based
upon fraud from the outset. Tamar could not afford the acquisition
without the false valuation of the Gem of Tanzania and as the economic

climate changed so did the instances of fraud as the ability of Wrekin to
cover its costs diminished.

Unwin was no angel, he could only have survived if Wrekin had
achieved consistent and sustained growth. If it didn’t then extracting as
much cash from the company would be an attractive (but illegal)
strategy. So we are dealing with a business where controls were absent

and opportunities present. The problem however, was always going to
be the Gem of Tanzania and its false valuation.