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| First Brands and the Cockroach Theory (2289Q) |
Course CPE: 1 hour
Field(s) of Study: Auditing–1 hr
Program Level: Intermediate
Prerequisites: Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.
Advanced Preparation: None
Delivery Method: QAS Self-Study |
Item
Number: 26BV0629FBC
Shipping Weight: 0lbs. 0oz. |
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$99.00 |
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Recording Date: June 29, 2026
Presenter: Michael D. Pakter
Program Description:
This course will examine how complex financing structures, weak internal controls, and aggressive accounting practices can obscure a company’s true financial condition, and ultimately lead to financial collapse. Using the First Brands Group bankruptcy as a central case study, the program will explore how more than $2.3 billion in apparent receivables-related financing became unaccounted for, prompting creditor concern, bankruptcy proceedings, and a U.S. Department of Justice investigation.
Takeaways
After completing this course, attendees will be able to explain how accounts receivable factoring works and how such arrangements affect a company’s liquidity and financial reporting. Participants will be able to identify red flags associated with off balance sheet financing and potential double factoring of receivables. They will also be able to apply basic forensic accounting procedures to trace invoices and detect irregularities in receivable financing transactions. Finally, attendees will better understand how weak internal controls and aggressive financing practices can conceal financial distress and contribute to corporate failure.
After completing this course, you will be able to:
- Determine the structure and mechanics of accounts receivable factoring, including the differences between recourse and nonrecourse arrangements and the circumstances under which companies use factoring to obtain short term liquidity
- Identify how off balance sheet financing arrangements can affect the presentation of a company’s financial condition and how such structures may obscure liabilities or distort reported financial performance
- Recognize the financial reporting risks associated with factoring transactions, including the potential for duplicate pledging of receivables or “double factoring,” and understand why such conduct is typically considered fraudulent
- Select the internal controls and accounting system safeguards necessary to prevent improper factoring transactions, duplicate invoice pledging, and other receivable based financing abuses
- Determine forensic accounting investigative techniques to trace receivables from the underlying sale through factoring transactions and ultimate customer collection in order to detect irregularities or misstatements
- Differentiate how aggressive financing practices, inadequate controls, and opaque corporate structures can contribute to financial distress and bankruptcy, using the First Brands collapse as a case study
For more information regarding refund or concerns, please contact our offices at (800) 677-2009.
The Consultants’ Training Institute (CTI) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. |
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