Case 11.2 : The Baptist Foundation : Funds of The Faithful
The Baptist Fondation of Arizona (BFA), begun in 1984, was a real estate investment nonprofit that did quite well at its beginning stages. The BFA had a psychology going with its fund and with recruiting investors. Each year, at its annual convention, the BFA distributed its "Book of Reports" could be given to others as a means of recruiting new investors. however, by 1988 both the Arizona economy and its real setate market were sinking fast. rather than disclose that the downturn had affected its holdings, BFA opted not to write down its properties. The management team's campensation was tied to the perfomance of the fund. Arthur Andersen, the Auditor of BFA, noted the presence of specific revenus targets set by manangement for each quarter with compensation packages tied to those targets. in this case, there is an unethical issue, the BFA try to manipulate their financial report. They try to show that although in bad condition of Arizona economy, they can survive and ha...