In 1993, Peter John Holdings was bankrupted in United Kingdom. John Holdings bankruptcy was the largest in history, as its assets far crossed those of previous bankrupt giants. Peter John was holding the 6th Largest U.K. investment bank, with 200 billion in assets and 341 billion in debt. Peter John survived many challenges but was eventually brought down by the collapse of the mortgage market. Peter John had become heavily involved in the mortgage market, owning the mortgage. Peter Johns bank held forty times as much in real estate products as they had capital, and it had been borrowing too much money to fund its mortgage investments. When the market twisted, John was overloaded. John could not sell so many risky low rated mortgages, the mortgage crash affected the bank badly and in quick time they lost 61 % of its value. Investor confidence in the bank quickly declined, leading to the crises. This was a pivotal event in the financial crisis that began in the U.K. mortgage industry and it spread to the credit markets and throughout the worlds financial markets. The crisis resulted in significant and wide losses to the economy. Estimates of the cost to the U.K. economy based on lost output amounting millions of UK Pounds. Other factors contributing to Johns failure were, highly risk taking business strategy supported by limited equity, complexed investment products and corporate structures that spread operations and risks. There were lot of regulatory gaps that ignored the systemic risks posed by large global firms like John Holdings. a. Accounting theory has great utility for improving accounting practices and resolving complex accounting issues. If Peter John Holdings would have followed best accounting practices, they would not have been bankrupted. What crisis was created because of the above scam? Justify your answer with the above case study. b. In your opinion, did Peter John have appropriate corporate governance structure and internal controls in place? Did these structures and controls operate as proposed?