John Kerviel's Scandal

SOCIETE GENERALE: AN INSTRUCTIONAL CASE FOCUSING ON INTERNATIONAL history AND AUDITING ISSUES Michael C. Knapp University of Oklahoma Carol A. Knapp University of Oklahoma ABSTRACT In late January 2008, Societe Generale, Frances second largest chamfer, announced that it had incurred a 6.4 million euro dismissal everywhere the three-day period January 21-23, 2008. That pass wiped out twenty percent of the lodgeing companys capital. Societe Generales CEO reported that the huge loss was attributable to the unauthorized activities of one rogue trader. This miscue focuses on three key issues raised by the Societe Generale fraud. First, this case examines the challenge of how one low-level employee could circumvent the sophisticated internal controls of a huge bank. A related issue is how Societe Generales auditors failed to uncover the internal control deficiencies that allowed the massive fraud to be perpetrated. Finally, this case addresses the surprising decision made by Societe Generale to back downdate the 6.4 billion euro loss. Although that huge loss occurred in 2008, the bank included the loss in its 2007 financial statements. Jerome Kerviel was born and raised in Pont-lAbbe, a small coastal village in the Brittany region of northwestern France. His father was a blacksmith, while his mother worked as a hairdresser.

Throughout his adolescent years, Kerviel dreamed of experiencing the excitement of nearby Paris, the city of Lights. Not surprisingly then, after completing under ammonia alum and graduate degrees in finance, the 23-year-old Kerviel accepted an entry-level position in Paris with Societe Generale, Frances second largest bank. 2 Kerviels job at Societe Generale knotty working in the financial institutions ?back office.? For four years, Kerviel effectively served as an internal auditor ensuring that the banks employees were complying with applicable company policies and procedures. His responsibilities included monitoring the banks securities trades to identify... If you want to get a full essay, pose it on our website: Ordercustompaper.com

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