A Case Of Accounting Fraud - 1555 Words

Another major case of accounting fraud driven by the desire to build and protect one’s personal financial condition is the WorldCom debacle. Bernie Ebbers had to show continually growing net worth in order to avoid margin calls on his own WorldCom stock that he had pledged to secure loans. When WorldCom, the telecommunications giant, failed and was put into bankruptcy, the U.S. witnessed the largest accounting frauds in history. Former CEO, Bernie Ebbers, was convicted of orchestrating this accounting fraud and was sentenced to 25 years in prison in July of 2005. For Ebbers, who is 63 years old and has a heart ailment, this will likely mean spending the rest of his life behind bars for his role in the biggest corporate accounting fraud in US history. He was convicted by a federal district court in New York of fraud, conspiracy and making false filings. The fraud carried out at WorldCom amounted to a staggering $11 billion, far greater even than the accounting manipulations at Enron. Thousands of workers lost their jobs and life savings after WorldCom collapsed in the summer of 2002, and tens of thousands of investors were defrauded. WorldCom made major accounting misstatements that hid the increasingly risky financial condition of the company, by recording more than $9 billion in false or unsupported accounting entries in WorldCom s financial systems in order to achieve desired reported financial results. In 1983, Ebbers formed Long Distance Discount Service (LDDS). TheShow MoreRelatedThe Case About Accounting Fraud At Worldcom1964 Words   |  8 Pagesthe analysis of the case about Accounting Fraud at WorldCom Group member: Weichuan Xu Miao zhou 1. What are the pressures that lead executives and managers to cook the books? Firstly, one of the pressure is the company’s goal that was made by the top executive Ebbers. There is an economic recession and the bubble collapse which make the conditions deteriorate in 2012. He thinks that the company should focus on being the NO.1 stock on Wall street rather than the company’s really good operationRead MoreThe Accounting Fraud Case At Computer Associates1080 Words   |  5 PagesAs requested I have completed an analysis of the accounting fraud case at Computer Associates (CA) in preparation of your speech at the American Accounting Associations annual meeting. I have structured my analysis to correspond to six key questions that arose from the case and Stephen Richards actions while Head of Global Sales at Computer Associates. How serious were Stephen Richards’ actions? Why? Stephen Richards’ actions were plain and simply criminal, and therefore very serious. RichardsRead MoreTyco International Accounting Fraud Case Study1544 Words   |  6 PagesTyco Accounting Fraud: Tyco International is an organization with operations in approximately 100 countries resulting in its claim as the largest manufacturer and servicer of electronics and electrical items across the globe. Actually, the firm designs and makes undersea telecommunications systems, electronic security systems, specialty valves, and fire protection systems. The company has also developed to become a major player in the several other markets including adhesives markets, disposableRead MoreAccounting: Fraud and Problem-based Learning Case18144 Words   |  73 PagesISSUES IN ACCOUNTING EDUCATION Vol. 18, No. 2 May 2003 pp. 137à ±173 The Tallahassee BeanCounters: A Problem-Based Learning Case in Forensic Auditing Cindy Durtschi ABSTRACT: You are auditing the books of the Tallahassee BeanCounters (TBC), a minor league baseball team in Tallahassee, Florida. During your audit the teamà ­s owner, Franklin Kennedy, approaches you and offers an additional fee if you will quietly investigate the possibility of fraud within the firm. Mr. Kennedy reports that he receivedRead MoreFraud Cases: Violations of Generally Accepted Accounting Principles (Gaap)1112 Words   |  5 PagesFraud Cases: Violations of Generally Accepted Accounting Principles (GAAP) Section 1 In July 2002 the Sarbanes-Oxley Act was passed by the U.S. Senate by a vote of 98 to 0. The bipartisan support for the legislation emanated directly from the investing public’s lack of tolerance for financial statement fraud. Not surprisingly, when formulating its post-Sarbanes technical audit guidance, the Public Company Accounting Oversight Board (PCAOB) made it clear that detecting fraud must be the focusRead MoreFraud Cases: Violations of Generally Accepted Accounting Principles (Gaap)1097 Words   |  5 PagesFraud Cases: Violations of Generally Accepted Accounting Principles (GAAP) Section 1 In July 2002 the Sarbanes-Oxley Act was passed by the U.S. Senate by a vote of 98 to 0. The bipartisan support for the legislation emanated directly from the investing publicà ¢Ã¢â€š ¬Ã¢â€ž ¢s lack of tolerance for financial statement fraud. Not surprisingly, when formulating its post-Sarbanes technical audit guidance, the Public Company Accounting Oversight Board (PCAOB) made it clear that detecting fraud must be theRead MoreForensic Accounting and Your Organization1185 Words   |  5 PagesForensic Accounting and Your Organization 1 Running Head: FORENSIC ACCOUNTING: WHAT IT CAN DO FOR YOUR ORGANIZATION Forensic Accounting: What It Can Do For Your Organization Kira Bailey Dr. Harper BUS 520 Strayer University Charleston, SC Forensic Accounting and Your Organization 2 ABSTRACT Forensic accounting is the application of financial skills and an investigative mentality to unresolved issues, conducted within the context of the rules of evidenceRead MoreFinancial Statements Of Financial Statement Fraud1304 Words   |  6 Pages Financial Statement Fraud Financial statement fraud is any intentional or grossly negligent violation of generally accounting principles (GAAP) that is undisclosed and materially effects any financial statement. Fraud can take many forms, including hiding both bad and god news. Research shows that financial statement fraud us relatively more likely to occur in companies with assets of less than $100 million, with earnings problems, and with loose governance structures (Hopwood, Leiner, YoungRead MoreRevenue Recognition Changes Caused Fraud1139 Words   |  5 PagesCaused Fraud There were 347 alleged cases of fraud involving public company according to Fraudulent Financial Reporting: 1998-2007 sponsored by Committee of Sponsoring Organizations of the Treadway Commission (COSO, 2010) that were investigated by Securities and Exchange Commission (SEC) on May 2010, which is showing 53 increased in the number of fraud when compared to the 1987-1997 study (p.5). COSO’s result is a sad number in a 10 year period, which averaging close to 35 accounting frauds a yearRead MoreCorporate Fraud Has Taken The World By Storm For Over The Past Decade1479 Words   |  6 PagesCorporate Fraud Introduction Overview Corporate fraud has taken the world by storm for over the past decade. The biggest fraud cases to ever occur happened in 2001 and 2002 and since then fraud seems to be more and more common around the world. According to Forbes.com (n.d) the biggest fraud cases to ever occur was Enron, Bernard Madoff, Lehman Brothers, and Cendant, with Enron being the largest accounting scandal to ever take place. Prior to Enron’s fraud scandal coming to light in 2001, they