What Went Wrong? Accounting Fraud Andlessons from the Recent Scandals

Full Article In the public eye, Enrons mission was nothing to a greater extent than the cover story for a great fraud. --Bethany McLean and Peter Elkind collective FRAUD, BANKRUPTCIES, AND VARIOUS ILLEGAL ACTS HAVE always been part of the business organisation environment. Every time fiascos erupt there is a shock, hardly business history records dozens of major failures, frauds, and other measures of massive corruption each decade. The big ones often hit during recessions or periods of other economic problems, as expected. The high-risk firms are the about vulnerable to economic shocks. The recent scandals are no exceptions. The near important scandals are the focus of this paper and are summarized in table 1. Although the problems that exist are diverse, a few third estate characteristics stand out. The first is the obvious backdrop of corporate greed. Presumably, cured executives expect to get away with it. They also fit the financial-corporate refining described above. And earnings manipulation is part of (and usually primaeval to) most of the scandals. Some of them used brazen and unsophisticated approaches (such as WorldCom), while others used new, sophisticated devices to defraud (like Enron). Determining the beingness of criminal acts takes years.

Two industries were particularly prominent in the scandals: the competency companies and telecommunications. Deregulation allowed the stodgy energy companies that carried out such primary operations as transmitting natural gas to draw high-tech energy traders using sophisticated derivatives and structured-finance deals. The result was elephantine profits for the lenders. Continued big profits meant increasing risks and much complex deals. For Enron and others it also meant hiding the losses in arguable and often fraudulent off-balance-sheet schemes. The telecommunications industry transformed from monopolist AT&T in the 1970s to a group of self-propelled and competitive high-tech giants, all trying to integrate and tower with new... If you want to get a full essay, order it on our website: Orderessay

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