CSC, Computer sciences corporation has been in the public eye following their quite shocking fraud case.
“Computer Sciences Corporation is an American multinational corporation that provides information technology services and professional services.”
Being such a high-profile company, I wondered what fraud they would have committed, especially being a company with customers in sensitive areas like the government. Turns out, they actually committed fraud with the NHS, a privately owned company however owned by the secretary of state for health.
What was the fraud committed? :
CSC overstated it’s earnings and hid from it’s investors the fact that it had significant problems with it’s largest contractor, the UK’s NHS.
How they committed fraud? By :
1)Using improper accounting models that contained made up assumptions, approved by former CEO Michael Laphen.
2)Failing to make required disclosures and making misleading statements to investors.
The root of this was that CSC would miss it’s deadlines with the NHS, and needed to avoid a significant negative hit to their income.What made this more astonishing is the fact that a lot of their services are extended to government agencies , yet they still committed fraud.
General musings:
Being a customer, thus a stakeholder for many companies, I found it interesting to consider how I , or stakeholders other than the Owners would have been affected by this fraud. If i were a CSC customer, would this be a reason for me to reconsider our relationship? Or would their service be too critical to change from…?
Picture from : computerweekly.com
