This was designed to limit the total amounts of insider selling for tax purposes. As time went by, Swartz used this program to give all employees loans for any reason. This helped Kozlowski and other executives to receive large loans from this program (that were forgiven in the future). ("Tyco," n.d., pp. 389 -- 402) (Farrell, 2011, pp. 442 -- 446)
The Impact of Auditors
Price Waterhouse Coopers was the auditor of Tyco. When the unauthorized loans were discovered they asked executives about them. but, they did not report their findings to regulators and investors. Instead, this was considered to be an issue of non-material significance (which allowed the fraud to continue). The combination of these factors is showing how the author is discussing the role of the different parties with the fraud. As a result, this is indicating what factors helped to make the scam continue for so long. This is the point that different parties were involved in Kozlowski's activities through: ignoring red flags and providing indirect assistance. ("Tyco," n.d., pp. 389 -- 402) (Farrell, 2011, pp. 442 -- 446)
Questions for Thought
What do you think Kozlowski's motivation for trying to avoid sales taxes on his art purchase was? Explain.
Kozlowski was avoiding sales...
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