Numbers game; how MiniScribe got its auditor's blessing on questionable sales; Coopers & Lybrand allowed computer firm to make suspicious adjustments; Cooper says it was misled

Article Abstract:

MiniScribe Corp, a computer disk drive manufacturer, allegedly misled its accounting firm, Coopers and Lybrand, so that its 1986 financial report inflated its profits from an actual $12.2 million to $22.7 million, losing many of MiniScribe's bondholders over half for their investments. Bondholders have filed suits against MiniScribe's former chairman, its investment bank Hambrecht and Quist, and Coopers and Lybrand for malpractice. Malpractice suits are increasingly common as investors claim that auditors are protecting their clients at the investors' expense. Coopers denies complicity in the fraud, claiming it was deliberately misled and manipulated by MiniScribe, which was allowed access to its 1986 financial report to make some adjustments. Bondholders have been awarded over $550 million in damages, $200 million of which are Coopers' responsibility. Contention had arisen between Miniscribe and Coopers over the 1986 audit, much of which MiniScribe could not document. The Securities and Exchange Commission had investigated MiniScribe's sales reporting in 1987 but took no action.

Accounting, auditing, & bookkeeping, Computer storage devices, Finance, Services, Auditing, Investments, Fraud, Accounting firms, Accounting services, Computer storage device industry, Lawsuits, Financial Report, Coopers & Lybrand L.L.P., MiniScribe Corp., MINYE

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Overhaul; Colgate is making a huge bet on controversial new software; if it works, no corner of its business will go untouched

Article Abstract:

SAP AG's R/3 CIM software interconnects and organizes the daily operations of a business. The modular software changes the way a company operates and reduces the time and costs related to shipping products and handling inventory. Colgate-Palmolive began using R/3 in 1995 and plans to have all of its US operations on the network by the end of 1996. The company's international operations will tie into the network in 1997. R/3 implementation can be traumatic for employees, whose jobs may change or even become obsolete, and the transition frequently takes up to three years. Some industry analysts warn that R/3 is too complex, but advocates believe the user-friendly interface hides the complexities from users. Colgate is employing R/3 in virtually every aspect of its core operations and is linking its network to major customers and suppliers. The company will not say how much it has invested in the new system.

Prepackaged software, Soap, Cleaners, and Toilet Goods, Soap, Cleaning Compound, and Toilet Preparation Manufacturing, Soaps, Detergents & Toiletries, Engineering, Mfg Software Pkgs, Usage, Product information, Company systems management, Information management, SAP AG, Consumer goods industry, Colgate-Palmolive Co., CL, Soap and cleaning agents industry, Cleaning agents industry, CIM Software, R/3 (Business management software)

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