Accounting Scandals
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What is an Accounting Scandal?


Accounting scandals occur when trusted executives in a company falsify accounting documents by over-stating revenues, understating expenses, misusing or misdirecting funds, over-stating the value of the corporation's assets, or under reporting the existence of liabilities. These unethical accounting practices are illegal and usually result in jail time.


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Recent Accounting Scandals

Table


The following is a table of recent Accounting Scandals, the executives involved and the consequences they now face:

Company

Name of Executive

Former Position

Sentence

Enron
Kenneth Lay
Chairman
Still on Trial

Jeffrey Skilling
President
Still on Trial

Andrew Fastow
CFO
10 Years

Richard Skilling
Accountant
7 Years, owes 1.25 million
WorldCom
Bernie Ebbers
CEO
25 Years

Scott Sullivan
CFO
5 Years

Betty Vinson
Accountant
5 Months
Tyco
Dennis Kozlowski
CEO
8 1/3-25 Years

Mark Swartz
CFO
8 1/3-25 Years
HealthSouth
Richard Scrushy
CEO
Not Guilty

William Owens
Finance Chief
5 Years

Weston Smith
CFO
2 1/4 Years

Jason Brown
VP of Finance
1 Year
Adelphia
John Rigas
CEO
15 Years

Timothy Rigas
CFO
20 Years

Michael Mulcahey
Accounting Treasurer
Not Guilty


YouTube Video


In the 1980's Barry Minkow committed one of the largest accounting frauds. In the video below he explains how he pulled it off and how he is now using his knowledge to catch other conmen.








RSS Feeds


AllBusiness.com



AllBusiness.com Blogs - Business Fraud Focus

MSNbc.com


NBCNews.com: Corporate Scandals
  • Charges dropped against Stockman
    Federal prosecutors dropped charges Friday against former Reagan budget director David Stockman, who was accused of overseeing a sweeping fraud at a troubled auto parts supplier.
  • Adviser gets 12 years in prison in fraud case
    A federal judge sentenced an investment adviser to 12 years in prison on fraud charges related to the loss of $213 million in a hedge fund at the state agency for injured workers.
  • Judge sentences ex-Refco CEO to 16 years
    The former chief executive of Refco Inc. was sentenced Thursday to 16 years in prison for a financial cover-up that brought down one of the world's largest commodities brokerages.
  • Ex-Bear Stearns execs may face fraud charges
    U.S. prosecutors are preparing to file criminal charges against managers of two Bear Stearns hedge funds whose collapse helped kick off the credit crisis last year, the Wall Street Journal reported on Monday.
  • Ex-CEO of Broadcom pleads not guilty
    Co-founder Henry T. Nicholas III of Broadcom Inc. pleaded not guilty Monday to federal drug and securities fraud charges alleging wrongdoing inside and outside the company.
  • Broadcom exec faces drug, conspiracy charges
    Federal officials unsealed two indictments charging Broadcom co-founder Henry T. Nicholas III with conspiracy and securities fraud relating to stock options backdating.
  • AIG sues ex-CEO Greenberg for breach of duty
    American International Group Inc has filed a complaint in New York Supreme Court against former Chief Executive Maurice "Hank" Greenberg and six other former directors and officers, accusing them of breaching their fiduciary duty.
  • Appeals court orders new trial for Nacchio
    A federal appeals court ordered a new trial Monday for former Qwest CEO Joe Nacchio, saying the trial judge wrongly excluded expert testimony important to Nacchio’s defense.
  • Lawyer gets 2 years for kickback scheme
    A former partner at a prestigious New York law firm has been sentenced to two years in federal prison for his role in a lucrative kickback scheme involving class-action lawsuits.
  • Corporate Casanova’s dirty secrets seeping out
    David Colby was one of corporate America’s most admired executives before he was abruptly fired last spring for what was vaguely described at the time as misconduct of a “non-business nature.”



About the Author

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I am a 19 year old first year business student majoring in Accounting at the University of Ottawa. So far this year I am enjoying my classes and participating in Telfer's many events! I have lived in Ottawa all of my life but I love traveling to other countries.




Wiki Use


The use of a Wiki for this topic was extremely effective as it allowed for the collaboration of my personal knowledge on the topic, edits and additions from people viewing my Wiki, and videos and news feeds from various sources. This collaboration maximizes the amount of information on my topic and creates a great system for sharing information.

References


1. http://www.msnbc.msn.com/id/9399803/
2. http://www.huffingtonpost.com/2010/03/17/biggest-accounting-scanda_n_502181.html#s74418&title=undefined/
3. http://hubpages.com/hub/10-Scandals-That-Rocked-the-Accounting-World/
4. http://www.cluteinstitute-onlinejournals.com/PDFs/200770.pdf
5. http://en.wikipedia.org/wiki/Enron_scandal
6. http://en.wikipedia.org/wiki/Tyco_International
7. http://en.wikipedia.org/wiki/MCI_Inc.
8. http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act
9. http://news.bbc.co.uk/2/hi/business/1780075.stm
10. http://www.corporatenarc.com/enronscandaloverview.php

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