Financial circumstances Essay

The company was a well growing established retailer industry in the market, how ever due to the scandal charges against Wickes. This caused a lot damage to company itself, it gave Wickes a bad status in the market and also they were black listed which meant that the company had a poor financial history so therefore in the future they will be refused on credit products and any other kind of financial circumstances. On the same day the company got black listed which was on the 25th June 1996, the announcement of the scandal was exposed to the public. The announcement of the scandal instantaneously affected the company’s market value to 150 million pound and the stock was suspended from London market trading. So in order for Wickes to operate the business back to the way it was they refurbished its corporate management and also made emends with any shareholders and suppliers they had. This took the company a good two years of hard development. Bye the end of 1998 the company’s profits increased by 653 million pound so therefore sales rise by 27%. They instituted three new stores and redesigned locations to include ornamental and garden commodities. The fraud scandal could have been preventable in many ways, Wickes became aware of this incident when scandal exteriors and auditors thoroughly checked the books and notice the major extensive changes. How ever this could have been notice at an early stage. Wickes could carry out monthly or yearly check ups on transactions account to notice any changes or misappropriate mistakes occurred in the business. Wickes could employee internal audit; internal audit will improve the function of the organisation and consulting action which will be intended to add value to the business, along side meeting the company’s objectives. The organisations objectives will be achieved by bringing an efficient approach to evaluate and develop the efficiency of risk management, control and governance processes. Although to bring in an internal audit to check the operation of the business yearly will be expensive. In my opinion I personally think that Wickes will be able to pay for the expense of an internal audit as they are a fast established business which creates good profit. This will be beneficial for the business as a whole. Another suggestion to prevent the scandal could be to have good ethics and standards in place. The following charges which were made on the defendant were producing false statement and giving false information to the auditor (Arthur Andersen), so therefore Wickes could locate a system which contains a principle of governing morality and acceptable conduct. They could do this by producing a code of ethics which all the employees will have to fallow and can not be broken. Therefore the company will have strict rules and have control over their employees. This will help the business to be safe and prevent employee misbehaviour. An additional idea is to direct different position to different individuals; Henry Sweetbaum was the company’s former chairman and chief executive. So therefore Wickes could have given two individuals them to positions instead of just giving it to one individual. If they were two individuals directed for them positions then they would have had an inter link with one another jobs and would have been aware of what each one is undertaking. So therefore I personally think that the incident of the scandal would have occurred earlier than later if the former chairman and chief executive roles were given to two individual instead of just one. In conclusion I personally think that the fraud scandal which arose in 1996 for Wickes was a huge turn around for the company and now due to this incident they will be more careful now in the future. Wickes will be more alert and aware of how to minimise the risks and the prospect which occur in a scandal. Referencing  http://www.telegraph.co.uk/htmlContent.jhtml?html=/archive/1996/10/17/cwick17.html