Auditing Case Essay - 604 Words

Keith Parkinson 2/3/15 Auditing Case 1: Merry-Go-Round Merry-Go-Round (MGR) is a clothing retailer that was founded in 1968. The company’s locations were in malls that targeted the youth and teen market. In the late 1980s, the company was listed by Forbes magazine as one of the top 25 companies. By the early 1990s, sales fell due to stiff competition from other retailers. Facing bankruptcy, the company hired turnaround specialists from Ernst and Young (Eamp;Y) to help overcome the financial crisis. However, the company filed for Chapter 11 reorganization and due to that a group of 9,000 creditors filed a lawsuit against Eamp;Y saying they were the main reason for MGR’s decline. First of all, Eamp;Y violated GAAS first standard†¦show more content†¦Overall, I just think having a set of standards would keep a professional manner. Finally, we need to know if Eamp;Y acted ethically throughout this engagement. Eamp;Y had a close relationship with Rouse Co., one of MGR’s landlords. Eamp;Y was soliciting business f rom Rouse and provided significant tax services. Also, Swidler and Eamp;Y had participated in at least 12 different business arrangements, some of which resulted in Swidler receiving significant fees from Eamp;Y. I think these relationships had a direct affect on Eamp;Y’s advice to MGR. I think Eamp;Y acted unethically because they didn’t keep independent which is a violation of GAAS. I think it was clearly unethical on Eamp;Y’s part because they didn’t disclose any of this information with MGR. So, I purposely think Eamp;Y worked together with Swidler to increase the fees because Swidler was the one that referred MGR to Eamp;Y. To conclude, consulting advisors for Eamp;Y could have conducted business with MGR in a more of a professional manner, especially when disclosing relationships. I also think MGR could have done a better job and looked into Eamp;Y first before hiring them. In the end, I think Eamp;Y was more at fault just because they were unethic al about the entire situation and purposely hid information trying to help themShow MoreRelatedAuditing Case808 Words   |  4 PagesAudit case You are the engagement partner in a firm of chartered accountant and are reviewing the audit fire of a client ABC ltd. the audit manager has recommended that the audit option is qualified because he is in dispute with the directors of ABC ltd. The audit manager wishes the directors to create a large doubtful debts provision against a major debtor that is over six months old. The directors do not witch to alarm the public about the current liquidity problems of their major costumer becauseRead MoreEssay on Example Auditing Case753 Words   |  4 PagesExample auditing case 1)† Based on the information given in this case and your knowledge of auditor’s reports, identify the deficiencies in the draft of the proposed report. Do not redraft the report, but provide justification or explanation for each of the deficiencies you identify† (Pany, Auditors Report, 2010). A. In the Introduction paragraph it states â€Å"As discussed in Note K to the financial statements, the Company has properly disclosed a subsequent event dated March 14, 20x9† (Pany, AuditorsRead MoreAuditing issues in Enron case2114 Words   |  9 Pages1 Auditing issues in Enron case Independent Needed for the Houston office of Andersen, an audit partner that understands the role of being a public watchdog with ultimate allegiance to the creditors and shareholders . Arthur Anderson abandoned its roles as independent auditor by turning a blind eye to improper accounting, including the failure to consolidate, failure of Enron to make $51million in proposed adjustments in 1997, and failure to adequately disclose the nature of transactions withRead MoreInternal Auditing Case Study4373 Words   |  18 PagesAppreciative Internal Audit: A Strength-Based Approach to Quality System Auditing – A Case Study. Jon Morris President JDQ Systems Inc. Vancouver, BC, Canada Introduction Traditional internal audits fulfill an important need for companies with fresh ISO 9001:2000 Quality Management System implementations, but for companies with mature systems, those registered for more than five years, an innovative approach to auditing called â€Å"Appreciative Internal Quality Audit† can take them beyond complianceRead MoreEssay on Stanford Auditing Case923 Words   |  4 Pagesinvestors’ next step was to sue the auditors of Stanford Financial Group. BDO, the accounting firm that was responsible for auditing Stanford’s financial statements, is currently the target of a major lawsuit. BDO did not act in accordance with the responsibilities of an auditor and thus led to audit risk, lack of independence, and various violations of the PCAOB’s auditing standards regarding investment securities. BDO consistently issued unqualified reports when there were material misstatementsRead MoreThe Runners Shop-Case Study 11.1-Auditing Cases Essay2280 Words   |  10 PagesCase 11.1: The Runners Shop Relevant Guidance †¢ AU 339 (SAS 103): Audit Documentation †¢ Auditing Standard No. 3: Audit Documentation †¢ International Standard on Auditing 230’ (Revised) (Site -http://irba.co.za/documents/doc_00535.pdf ) Questions 1] Describe the purposes of audit documentation and explain why each purpose is important. According to AU 339.03, â€Å"audit documentation provides the principal support for the†: (a) â€Å"representation in the auditor’s reportRead MoreEssay Anonymous Caller Auditing Case Study1029 Words   |  5 PagesAnonymous Caller Case Study 1 a) What would you recommend to the caller if you were Dr. Mitchell? Since it appears that the firms top executives are all apart of the fraud and don’t plan on correcting their unethical action. I recommend that the anonymous caller completely remove himself/herself from the situation by resigning or by reporting the situation to the firm’s board of directors or a governmental agency. b) What are the risks of continuing to work with the company? ThereRead MoreThe Role of External Auditing in Public Sector Governance. a Case of Zimbabwe15117 Words   |  61 PagesUses of Information Technology to Auditing†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.15 2.3 Audit Process†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦16 2.4 Audit Opinion and CAATS†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦22 2.5 Impact of a computerized system on the Audit Process†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.26 2.6 Knowledge and Experience†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.28 2.61 Audit Documentation†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.29 2.7 Information Technology and the development of Computer Auditing†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.31 2.8 Auditor Competencies†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Read MoreAuditing Cases22626 Words   |  91 PagesAdditional Cases for the Course The case readings have been developed solely as a basis for class discussion. The case readings are not intended to serve as a source of primary data or as an illustration of effective or ineffective auditing. Reprinted by permission from Jay C. Thibodeau and Deborah Freier. Copyright  © Jay C. Thibodeau and Deborah Freier; all rights reserved. 1†¢Ã¢â‚¬ ¢Ã¢â‚¬ ¢ ( Case 61  ® Enron Enrori’s First Few Years hi~ 1985 Enron had assets along the three major stages of the supplyRead MoreBcci Case Study for Auditing5660 Words   |  23 Pagesactually in the UK. Because it was chartered in Luxembourg and Grand Caymans, Bank of England (BOE) thus thought itself as a secondary role in supervising BCCI, thereby reducing the level of scrutiny imposed on BCCI. In addition, BCCI has an uncommon auditing system. Price Waterhouse (PW) was the accountants for BCCI overseas, while Ernst Whitney in charged of BCCI holdings. Two sets of auditors being used was to avoid them from publishing a meaningful consolidated accounts and make sure neither of

Prophet Muhammad as Role Model for Religious Teachers Free Essays

ENGLISH ESSAY: PROPHET MUHAMMAD (PBUH) AS A ROLE MODEL FOR RELIGIOUS TEACHERS Prophet Muhammad (PBUH) is the example par excellence for his ummah, especially for religious teachers with his good example and noble personality. His behavior in all cases is the behavior that is not contrary with the Qur’an, in fact his behavior reflects the contents of the Qur’an such as his patient, sincere and forgiving character. In education, Prophet Muhammad (PBUH) has provided many lessons especially for religious teachers which can be applied on students. We will write a custom essay sample on Prophet Muhammad as Role Model for Religious Teachers or any similar topic only for you Order Now Firstly, as religious teachers we must always be patient as was done by Prophet Muhammad when he was performing prayers and Uqbah bin Abi Muit threw waste on him where he did not get angry instead He continued His prayer. Therefore, accept the students behaviour in whatever manner they are. Secondly, teaching sincerely is very important for religious teachers in which we should not hope for any rewards, Prophet Muhammad (PBUH) said, â€Å"Verily Allah will not accept charity unless the charity is exercised in good faith and done solely to please Allah. † Even Prophet Muhammad did not hope for any material rewards when delivering knowledge. Lastly, we must emulate the forgiving character of Prophet Muhammad where He was tested by a Jewish woman who tried to poison Him and He forgave her instead of having a grudge against the her. So as religious teachers, we have to forgive our students for whatever mistakes they make to guide them to seek Allah’s pleasure and Grace. In conclusion, religious education would be pointless if the teachers themselves behave badly. Prophet Muhammad (PBUH) exemplary conduct is the one and only to emulate to help us perform our duties as religious teachers effectively in order to get Allah’s Blessings. (281 words) How to cite Prophet Muhammad as Role Model for Religious Teachers, Essay examples

J.P. Morgan Persuasive Essay Example For Students

J.P. Morgan Persuasive Essay J.P. Morgan EssayMy life on the whole has helped the whole country prosper. I give away so much money to great causes. I also help the government with monetary crises. I admit that I am very wealthy. But is having money a crime in this capitalist country? Definitely not. I obtained my wealth by hard work and dedication. I never once backstabbed or stepped on people to get what I wanted. I have helped and continue to help companies that are in need of money. I have financed International Harvester, American Telephone and Telegraph, and General Electric. Without the money I gave these companies, they would never have existed. In essence, I have helped create great companies such as the above. How is this unethical?Not only do I help companies; I help the government whenever possible. After the panic of 1893, I helped reorganize railroad companies such as Northern Pacific, Erie, Southern, and the Philadelphia and Reading. The government didnt have the capital to aid these companies so I did because it needed to be done. Also, in 1895 I sold my firms $62 million government bond issues. Due to this, I helped end the gold shortage in the U.S. Treasury. In 1907 I loaned money to banks to keep them from closing after the panic of 1907. As shown above, I have aided the government several times out of the generosity that is in my heart. Helping the government and companies is good, but I wanted to give back to society. In order to do this, I decided to donate and help found public associations. I founded the Lying-In Hospital in New York City and gave a large sum of money to the Harvard Medical School. In addition, as an ardent Episcopalian, I gave a large portion of funds to build the Cathedral of Saint John the Divine in New York City. I also decided to share some of the great art works that I owned. I gave many valuable statues, pictures, and books to American libraries and museums. Some of my most famous collections were loaned to the Metropolitan Museum of Art, which I helped found as well. It is easily seen how my life helped every aspect of our country. Im not a low-down scoundrel off the streets. I am a generous, respectful man who enjoys helping others.

Lifting of Corporate Veil free essay sample

Lifting or Piercing the Corporate Veil is a Legal process or proceedings taken to uncover the common shield in respect of any suspicious event happened or to be happened or on the basis of allegation made or to be made against the Company. This piercing process can be compared to a person lifting the curtain of a Drama Stage to know what is actually happening without being the drama commenced. Piercing the Corporate Veil is a Premeditated process with an intention to curtail the unfair advantage enjoyed on forming of a Company. Merits on Incorporating a Company. Incorporating a Company is always preferred by active entrepreneurs than commencing a Partnership firm or sometimes a sole proprietorship. The major boons of incorporating a Company are: 1. Limited Liability. Almost all the Companies are started with limited liability status. A Company with Limited Liability indicates that a Members’ loss in a Company is only up to the value of his shares or loan made, if any thing unfortunate happens to the Corporate. We will write a custom essay sample on Lifting of Corporate Veil or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The Personal Assets or earnings of Director or the Officer will never be put at risk. But if the event is a fraud or anything outside the purview of the Memorandum of Association (which means â€Å"Ultra Vires†) the Directors or â€Å"Officers in Default† {Section 5 of Companies Act} will be held for Personal Liability. 2. Protection of Name: The Company’s name will be protected immediately once it is approved by â€Å"Registrar of Companies† (herein after called as â€Å"ROC†). There will be no chance of another Company being started with the same name or even identical to the Companies Name. Whilst in the case of a Partnership Firm or Sole Proprietorship Concern, the name can be only protected by a Trademark Registration. 3. Existence. As an old proverb indicates, â€Å"Members may come and go, but the Company exists forever† is the gist of the Company formation. The Company will disappear only after the complicated winding up and liquidation process under the Specific order from Registrar of Companies or any other appropriate authority. 4. Raising Funds: There are not too many better options otherwise than incorporating the Company to raise funds for expansion of the markets for its products, commencing a new business, enter into a global market etc. Initially a Company will be floated as a Private Company (with a limit of 50 shareholders) and after rooting its base in the market, it may proceed with an Initial Public Offer to become a Public Company and gets listed in the Stock Exchange within 21 days of the closure of Public Offer (Usual Routine). A Company can also raise loan on its assets by creating a Charge (Fixed or Fluctuating) in favour of a Bank (Secured Creditor after Charge is being created) which is a very simple process done through MCA portal where the ROC is intimated by filing Form-8. 5. Taxation Benefits. The Taxation part is the most fruitful of all the benefits enjoyed by the Company. The Company’s liability for tax when compared to partnership firms and sole proprietorship concern is very limited. A corporate is blessed with so many deductions and other tax allowances which can be charged against the profits of the Company which limits the liability to pay tax. When Companies began to show Nil Total Income after their tax planning, Section 115JB was introduced in the Income Tax Act vide Finance Bill 2002, which articulates Minimum Alternate Tax whereby a minimum tax obligation was put on the Company which is charged against their Book Profits. Rising of Lifting the Corporate Veil concept. Any Company incorporated under the Companies Act, 1956, can enjoy all the fruits and permitted to do all the acts under the Laws of the land. But if the Companies start to get pleasure from other undue benefits prejudicial to the corporate habitat, the Lifting of Corporate of Veil concepts come into the picture. 1. Regular Company Law formalities are not followed. The Companies are required to abide with certain compliance formalities such as convening of Board Meetings and General Meetings, Filing of Balance Sheets with the RoC, filing Income Tax Return etc. When these regular formalities are not met or complied invariably, with/without any reason, legal actions may be initiated for piercing the corporate veil. 2. Disinvestment and Diversion of Funds. On some occasions directors may on their discretion, having the controlling stake may opt to disinvest or divert the funds without intimating the Shareholders. Such disinvestments or diversion of funds may adversely affect the financial stability of the Company in general and the interests of the stake holders in specific which invites the court to pierce the corporate veil of the Company. 3. Seasonal Non Payment/Excessive Payment of Dividend. Non payment or excessive payment of dividend to the shareholders may sometimes bring suspicions on other stakeholders or legal/governmental authorities for which lifting corporate veil proceedings get attracted. 4. Alter Ego concept. The Company being blessed with so many merits, will be floated and all regularities will be done at the initial stages so as to make it appear as an active company. But later, the alter ego of the Directors gradually starts visible and will occupy the driver’s seat of the company. When it is felt that there are some discrepancies being done placing Company as a shadow/mask, lifting corporate veil of the Company becomes indispensable. 5. Fraudulent Motive. When the judiciary feels that when there is any fraudulent activities are going on in a Company or there is a chance such malpractices, the Court has all the powers to pierce the corporate veil. 6. Enemy Character. At any time, if any Country has become the alien enemy (War has been declared against another Company), the Court has the authority to pierce the corporate veil so as to analyze the Shareholding and other management and fiduciary interests of the Alien Company in that Company to protect the General Interests. 7. Tax Regulation. If any tax legislation insists the appropriate authority to pierce the Corporate Veil, the Court would not mind the Separate Legal personality of the Company and proceed with digging the core of the formation and other commotions of that Company. Some Celebrated Case Laws related with Lifting the Corporate Veil of the Company: 1. Salomon Vs Salomon (1897) In this case, Mr. Saloman was dealing with shoe business. The Kingdom of Britain then enacted a statute providing for the incorporation of businesses and a corporation then had to have at least seven shareholders. Mr. Salomon formed a corporation, with all seven shareholders being members of his family. The business of the corporation eventually went under, leaving considerable unpaid debts and ever branching liabilities. The creditors argued in court that the shareholders should be liable for the debts of the corporation, because they were all related to Old Man Salomon, and that the corporation was set up a mere sham. The court held in favour of the shareholders, Old Man Salomons relatives. The fact that the shareholders were all related to Old Man Salomon was irrelevant in determining that the corporation legitimately existed as a separate entity, and thus the individual shareholders were not held liable for the corporations debts. This case law in a narrow aspect does not have any relevance with regard to Piercing Corporate Veil concept. But this judgment was taken as a trump card to taste the cream of formation of Companies. 2. Gilford Motor Company Vs Horne: In this case, the Court disregarded the judgment of Salomon Vs Salomon, questioning the distinct legal personality of a Company. Mr. Horne was an ex-employee of Gilford Motor Company and as per the terms of the employment, he should not solicit any of the Company’s customers. In order to defeat this provision, Mr. Horne incorporated a Company in his wife’s name and solicited all the customers for which the Company brought up action against him. The Court analyzed the motive of incorporating the limited Company and it was ipso facto found that the Company’s main purpose was to perpetrate the fraud. 3. Jones Vs Lipman This case is similar to Gilford Motor Company Vs. Horne. Here, Lipman entered into contract with Jones to sell his land. Later, Lipman changed his mind and transferred the property to a Company in order to avoid Specific Performance. But it was held that the Company as well as the transfer of property was only acting as a mask to avoid recognition by the eye of equity. 4. Edwards Company Inc Vs Monogram Company Inc: Monogram Industries acquired Entronic Corporation in the field of production of smoke detectors. Monogram made its purchases through its wholly owned subsidiary name Monotronics. Monotronics then entered a Limited Liability Partnership with Entronic Company and acted as a General Partner. In the course of the business, Edwards Inc granted loan worth $ 350,000 to Entronic Corporation which it could not ply went the market slashed. However, Monotronics, being a General Partner could repay a part of the loan worth $ 10,000 from its estate to Edwards Company. But, Edwards filed a suit against Monogram Industries for the recovery of the debt against Entronics, an attempt to pierce its corporate veil on the basis of the following grounds: a. The Board of Directors, Office and Contact numbers of Monotronics and Monograms are same. b. Monotronics was only a piece of paper or a dummy company as far as Monograms is concerned. But, the Honourable Court analyzed that: 1. There was nothing to prove or insist the court to order for lifting the corporate veil as there was no fraudulent act or injustice shown from the Company/Companies to escape from the liabilities. 2. There was no lack of separate existence of the 2 Companies. 3. There was no violation of any corporate formalities. 4. There was also no co-mingling of money and under capitalization in both the Companies. Taking in view of the above analysis, the Court quashed the suit filed by Edwards Company against the Monogram Group. Conclusion: It is always fruitful for active and vibrant entrepreneurs to expose their skills and respond to the changing environment by incorporating a Company. The Incorporation of such a corporate must be in the true spirit of law. Once the Company is floated, in spite of enjoying all the merits, it also has to comply with all the procedural and legal formalities. A Director of a Company must be also aware of Section 322 of Companies Act, 1956 which makes their liability unlimited. In the Era of Corporate Governance and Corporate Social Responsibility, the chance for lifting the Corporate Veil may not arise, but there are cases of â€Å"Fly by Night Entrepreneurs† and â€Å"Vanishing Companies† after the Initial Public Offer even after SEBI has framed vide variety of Guidelines for protecting investors and other stakeholders. In Taxation words, this can be compared with Tax Planning and Tax Evasion where the essence depends upon the intention of the assessee whether to apply all the loopholes available in the law or by pass the boundaries for unjust enrichment.