Norton, Curtis L.
B.A. (Bachelor of Arts)
Department of Accountancy
This project explains the bankruptcies of Grabill Corporation, and Laventhol & Horwath (a major accounting firm). William Stoecker formed Grabill Corporation to rehab and resell houses. Grabill Corporation would later start buying operating companies with borrowed money. William Stoecker and his Grabill Corporation eventually borrowed about three-quarters of a billion dollars. Grabill was not financially sound, but they had financial statements audited by Laventhol & Horwath that indicated otherwise. An article in Forbes magazine cast doubt on Stoecker's claims. This made his banks nervous, and they refused to loan him additional funds. With no additional funds, Stoecker missed a loan payment and was forced into bankruptcy. This project discusses Grabill Corporation as an example of the poor audit work done by Laventhol & Horwath that led them too into bankruptcy. Laventhol's problems stemming from their overly quick growth and other audit lawsuits are discussed to show the various factors leading to Laventhol's bankruptcy. Finally, the thesis concludes by drawing a number of conclusions about the condition of today's accounting industry and what accountants can do to minimize their inclusion in lawsuits from failed businesses.
Lipinski, James J., "William Stoecker/Grabill Corporation and Laventhol and Norwath: Bankruptcy of a man, his company, and his auditors." (1989). Honors Capstones. 1394.
Northern Illinois University
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