Case Study 2: HealthSouth
Case Study Resources
 READ “HealthSouthCan 5 CFO’s Be
Wrong?” (pages 304309 in the pdf file –
See Case Materials
folder in Blackboard).
 WATCH Ethics and
Fraud at HealthSouth:
Lessons from Inside a
Corporate Meltdown
(approximately 58
minutes). This is a
YouTube video.
Supplemental Video Resources (optional)
Scrushy Documentary: Part 1,
Part 2, Part 3, Part 4, Part 5
Scrushy Bribery Trial: Part 1,
Part 2, Part 3, Part 4, Part 5
(approximately 30 minutes total
viewing time).
(approximately 30 minutes total
viewing time).
Voice Thread Instructions for Case Study
•
Begin by making a copy of this master Voice Thread. Listen to my audio comments.
•
Rename your copy using this format: CS2_“Your Group Name”. Make sure that your copy remains on the
classroom page in Voice Thread. (It can remain hidden while you work).
•
For each case study question, group members should record a 2-3 minute comment in response to the question.
Please do not exceed 15 minutes of total commentary per question. Do not duplicate answers already provided
by your group mates. You should have a substantive comment that helps respond to the question. This will
require some planning on part of the group to determine how the response will be organized and recorded.
Comments should preferably be added using a webcam, at a minimum you need to record audio comments.
•
Citations to outside sources should be noted using the “text” commenting feature or included on a separate slide
at the end.
•
At the end of the Voice Thread, each group will create a Reflections slide on what they learned about ethics in the
case study. See later slide for additional instructions. You can also create a References slide if you do not include
citations with the question responses.
•
Remember to SUBMIT your group Voice Thread for grading when your group is done.
Question 1
What are the proper audit procedures to ensure
existence of assets in the financial statements? What
are the proper audit procedures to validate estimates?
(Cite authoritative sources only in response to this
question).
Question 2
What are the 7 signs of ethical collapse of a company
and how did these signs appear at HealthSouth?
Question 3
What were some of the major flaws in HealthSouth’s
corporate governance? (Make sure to define the term
“corporate governance”).
Question 4
• What are the proper audit procedures to validate
estimates? (Cite authoritative sources only in
response to this question)
Question 4
• What are the proper audit procedures to validate
estimates? (Cite authoritative sources only in
response to this question)
Reflections
What our group learned about ethics from this case
study.
References
Include print and electronic sources in alphabetical order