Top Accounting Scandals

In 2002 the Securities Exchange Committee filed the suit against Adelphia Communications Corp and all the members listed previously. Adelphia owned several subsidiary companies and the first SEC suit against them is for hiding the liabilities of Adelphia in these companies. The second was for making false statements to deceive others such as Wall

The officials were also found guilty of conspiracy; therefore, charges were later dropped against Curley, Spanier, and Schultz (Carpenter, 2011). All three of the officials were sentenced to jail time, fines, and probation as a result of the scandal. Spanier received a sentence of 4 to 12 months in prison, 7,500 dollars in fines, and two years of probation (CNN, 2013). There were emails, and notes from meetings included as evidence of the accounts being reported and discussed with officials

One example was the Credit Mobilier scandal where major stockholders of the Union Pacific Railroad formed the Credit Mobilier company and sold their shares to influential congressmen. These executives essentially hired themselves and stole taxpayer money, a very lucrative scandal. Scandals like the Credit Mobilier were widespread and executives from many other railroad companies often stole from their own companies. Many executives would manipulate the rail companies' stocks to profit greatly. Executives would often bribe influential politicians, and work together to profit themselves.

The business world wasn’t the only thing corrupt but the railroads were too. With the railroad industry growing the companies knew they could charge huge rate and gain a large profit. Congressmen were paid off to be quite about the scandal and kept it to themselves. The railroads raised the stocks and were given to well-liked companies.

Can we truly believe that just one or two bad apples cause these scandals? The environment is such that performance is rewarded, such behavior leads to rewards and everybody around them gets away with it, so why not do it too? Their managers may not direct them to behave unethically but certainly created the culture to behave so. Can Rupert Murdoch and his senior management get away with the excuse of “being in the dark”? I agree that they can’t be responsible for everything that happens in an organisation, but they must certainly shoulder some of the blame for creating conditions for the actions.

The AIG Scandal 2005 started when AIG management was issuing a press release describing its third quarter earnings in 2000 to the public. The report showed that the premium of AIG was significantly increasing, while its loss reserves was decreasing by $59 million. However, according to many industry analysts, along with the positive earnings, AIG in fact should show an increase in its loss reserves as well. This caused the investors of AIG suspected that AIG was drawing down its loss reserves to boost its profits. The suspicious of the investors has unfortunately led to the falling of AIG stock price from $99.60 to $93.30 on New York Stock Exchange (NYSE).

Actions which were taken by the company to cover unethical behavior of bribery and

The Credit Mobilier scandal took place in 1872 it involved Union Pacific Railroad and Credit Mobilier of America Construction Company. Also it involved fake of contracts and post war corruption. Major stockholders in the railroad formed a company and called it and Credit Mobilier of America. Thomas Durant thought of a money making machine that would make him so rich. It was an idea to make a railroad that would make more profit than the Union Pacific Company.

The controversy came about when the president and CEO of the organization who had been in that position since 1970, William Aramony, resigned amid allegations of money laundering among other things. Aramony was under investigation for fraud and mismanagement of funds. The trial that involved Mr. Aramony and the two codefendants lasted until 1995, when Aramony was convicted. He was convicted on charges of 23 of 27 counts of fraud, filing false tax returns, conspiracy, and money laundering. He and two top officials were also convicted of looting $1.2 million to fund an extravagant and lurid lifestyle.

Martin J. Sullivan, AIG’s CEO, who collected a severance package of nearly $50 million when he was ousted at a board meeting on June 15, 2008, when it came under investigation by the

It shows how the fraud was detected and the accounting practices that were used at the time, how the director

1. What factors in the WorldCom case support the conclusion that CEO Bernie Ebbers Knew about the financial statement fraud? What factors support his defense that he did not know about the fraud? Bernie Ebbers Knew about the financial statement fraud because he was the one who encourage others to go into financial fraud because of the stock prices were going down, which was affecting his marginal loan. For that reason, he was trying to sell his stock, but the board of Directors lent him $341 million, along with 2% interest rate.

Ebbers leadership style changed from ethical to unethical during the downturn of the stock market and the effects it had on WorldCom shares. Ebber leadership style created an environment that left for little room for error. During telecommunications stock downturns Ebber was unable to come up with a strategy that would turn things around. During the initial phases of the Commission investigation into WorldCom’s accounting practices, Ebber was questioned concerning several low-interest loans he acquired from the board of directors. Shortly after Ebber was forced out by outside board members.

In this Enron Scandal ,several moral issues and values are being discussed .The moral issues is the misconduct of code of ethics by management level of a corporation , violation of code of professional ,ethical dilemma that faced by a management level when involved own interest . The first moral issues that discussed in Enron Scandal is misconduct code of ethics by management level of a corporation .In this case ,the mastermind of this scandal is the company CEO , Mr .

Background WorldCom, once known as one of the most powerful telecommunication organizations of the world, is now studied as a case of a fraudulent company that carried out unethical financial activities to cover its weakening position in the market. After some aggressive investment decisions, the company started to witness huge financial pressure. The management used various forged accounting entries to conceal its weakening position. Cynthia Cooper, Vice President Internal Audit, discovered the unethical activities and raised the issue with the management and relevant departments and received bitter responses. She carried out internal audits in her own capacity with her colleagues and compiled evidence against fraudulent activities.