MR PETER is the case the subsequent ego became a CEO of Health South, a company he joined many years ago as therapist. As with the other CEOs, MR PETER used his aggressive business strategy and his minated the decision making at HealthSouth MR PETER started as a respiratory and realized that a lot of money could be made if certain services performed in hospitals uld be shifted to outpatient services e short term quarterly results were driving the decision making at HealthSouth. MR PETER n EPS (earnings per share) target and then he would make sure that HealthSouth always would set met or exceeded this benchmark. This continuous winning streak actually became a competitors had complained about since HealthSouth was the only firm i to constantly hit their financial targets. HealthSouth would mani iccounts such as the contractual adjustment account which is used to estimate the variance bet the amount billed to a d flag that n the industry to be able pulate their figures d the amount insurance will pay. This account was used since it was based on estimates and it was very hard to verify any balances within the account. As a result every quarter, HealthSouth would generate fraudulent financial statements that were sent to th patient an Securities and Exchange Commission. The statements would always match the fina presented by MR PETER ncial forecast Despite statements from all the previous HealthSouth's CFOs that MR PETER was involved it the financial statement manipulation, MR PETER went with an ostrich defense that he did no know about any wrongdoing and that it was all the fault of the subordinates. By the time M PETER went on trial in January 2005, the estimated level of the fraud had reached S5 billion Despite the guilty pleas of lower level employees and the conviction of others, MR PETER w le to walk away a free man. He was found not guilty on June 28, 2005 on all 36 criminal co against him. However, almost exactly one year later, on June 29, 2006, MR PETER was convicte of giving a S500,000 bribe to a government official. Is it reasonable to think a CEO would not be aware of fraud of this magnitude? Explain 2 Identify the stakeholders in this case. Explain the impact of the fraud on each of th stakeholders 3. What would you think will be the future of the company? And what lessons do you dra Jorm this? 4. Why do so many illegal activities that occur within a firm relate to the manipulatio of the firm's financial statements