09.08.2019-292 views -hollatecasestudy
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Jack Brennahan had his dream work. He had always wished for to head a manufacturing company and five years before he received that prospect at Hollate when he was promoted from your CFO position. He loved the work, fantastic environment he previously helped generate, and the people around him. As CEO, however , Brennahan understood the fact that buck stopped with him. He required his responsibilities seriously in running a good business and ensuring that the company met almost all regulatory requirements and ethical expectations of being a good business citizen. He never desired to be ashamed of anything he read inside the newspaper regarding Hollate. Brennahan, however , experienced just received a call from Cara Porcini, Hollate's external auditor, implemented immediately with a call coming from Mike Soltany, Hollate's review committee seat. They had media that ended him cold.
Hollate began making products for the home
construction market in the 1950s. For the majority of of their
history it comprised 1 division that made windows
and entry doors for the Southeastern location of the Usa
States. These products were distributed under a number of privatelabel and store brands. Seven years earlier, 2 yrs before Brennahan became CEO, Hollate acquired
a Midwestern door and window producer that as well
had a section that built roofing items. The purchase
enabled Hollate to gain access to new geographic and
product market segments, and also gain economies of scale in
management in addition to raw materials purchasing. Subsequent
this acquisition, Hollate held an initial open public offering
(IPO) and became a public company. Hollate used
proceeds from the IPO to acquire a manufacturer of
home siding products, a manufacturer of prefabricated
outdoor sheds and abri, and two other smaller sized home
construction product businesses.
In recent years a downturn inside the housing sector
impacted the entire home development industry,
including the manufactured items segment. Hollate
had taken a hit in both the revenue development and revenue
margins, nevertheless overall it had fared a lot better than its colleagues.
In hindsight, Hollate may have overpaid for that first
acquisition which acquired occurred before the downturn.
The subsequent purchases, however , were made on
favorable terms because they came after the early days of the
downturn acquired driven over the valuations of numerous
Hollate now got 14 categories throughout the U. S. and
Canada. Completely 2, 100 employees, revenue of $1 billion,
profit margins consistent with historical industry norms,
and a market capitalization of approximately $1. 5 billion.
With one or two exceptions, every single division was profitable
and was keeping market share.
CEO Jack Brennahan and the
Brennahan had joined Hollate ten years earlier since CFO
following working his way through several supervision
positions and promotions for two additional firms. Although his
backdrop was in fund and accounting, he always
considered himself a general director. As CFO, Brennahan
had played a respected role in integrating Hollate's first
buy and which makes it a success the two operationally
and financially. He also played out a leading function in acquiring
Hollate open public and determining its various other acquisitions.
If the previous CEO retired,...