Strictly speaking, the accounting regulations of the Federal Accounting Standards Board call any action without a significant amount of risk a loan, without any clear definition of what significant means. In this case, however, the risk does seem to be fairly negligible, and part of a consistent pattern of fraud on the part of AIG in terms of its income. It consistently manipulated its revenue to present a more pleasing financial picture to current and potential investors. The collusion between insurance companies and large corporations through fictive investments that are really secure loans is common. Take the case of another AIG scam, selling insurance to the Brightpoint Inc. cellular phone company, after the cell phone company had already incurred losses. The company paid premiums to AIG, and AIG took over the payments so the cell company could record these as receivables and improve its own projected state of financial...
Given the softening economy, many insurance companies are faced with great financial devastation at the prospect of paying out more premiums. The FASB must set clearer standards as to what constitutes a significant risk, even if particular dollar figures cannot be stipulated within its code. A significant risk should be taken to mean that a reasonable person or investor, when viewing the transaction, could be expected to assume that the balance of the payment might not be returned in contrast to the situations delineated above.
The reality was that a company which aspired to be "the No. 1 stock on Wall Street" was instead steadily bleeding money while claim growth in the billions. The pressure placed upon accountants at WordCom was reflective of the pressure facing accountants throughout the economy during this period of widely absence securities oversight. Indeed, the relationship between regulation and accounting is essential, and this diminished link would have catastrophic implications
Rite Aid Fraud Over the years, there have been numerous cases of financial fraud perpetuated within the organizational mainstream of major companies. Financial fraud is often a well-coordinated sort of white-collar crime that often -- but not always - requires complicity and collusion amongst financial accountants, top management and auditors. Rite Aid came to the limelight after the U.S. Securities and Exchange Commission announced that it would be filing accounting fraud
"And, then, all of a sudden, the bottom fell out of these companies. it's a reckoning." The question becomes: are there any honest and ethical business executives anywhere? Let's take a look. Former corporate CEOs like Richard Fuld of Lehman Brothers, faced down questions and cameras on Capitol Hill; former executives of the insurance giant AIG were also questioned. One topic of discussion: the fancy retreat hosted by AIG after an
This presented the troubling consideration that many of the current standard-bearers for physical excellence were the product of performance enhancing drug use. Moreover, this cast a dark shadow on what have been regarded as some of the game's greatest recent accomplishments, which had been achieved through cheating. In that vein, Canseco's claim was succeeded by an admission that seemed to justify this reproach. Mark McGwire, Canseco's former Oakland Athletic teammate,
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers and staff to meet the contingencies of the proposed systems and controls. The Sarbanes-Oxley section will help the companies on the other hand gain a lot of investment and support from the investors by providing a quality and timely information,
Improvements in Integrity, Financial Accountability, Ethical Conduct and Corporate Responsibilities under the Sarbanes-Oxley Act of 2002 We passed Sarbanes-Oxley in the wake of the Enron scandal to try to root out financial and accounting irregularities. How could similar irregularities occur at Lehman Brothers? History has a way of constantly repeating itself. -- Joseph Grant 2010 The high-profile corporate shenanigans by Enron and Lehman Brothers have made it clear that tough legislation was
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