But these bills were not received and paid for several months since these costs were incurred, while accounting principles required that the company made such payment estimations that were supposed to be matched by the revenues in the income statements. Therefore, the CFO told its subordinates to release accruals that were considered too high.
The CFOs of some of the units of WorldCom refused to book such entries. egardless of the CFOs repeated pressure, they refused to book these illegal entries. However, Sullivan managed to book his entries with the help of other managers that obtained the account number and determined subordinates to make the entry. In addition to this, some of the accounting department's employees made accrual releases without informing the senior managers.

This situation was established as a regular practice at WorldCom. The company's accountants also took part in this situation. This is because they accepted to release accruals…...

mla

Reference list:

1. Kaplan, R. & Kiron, D. (2008). Accounting Fraud at WorldCom. Harvard Business School. Retrieved January 30, 2011.

Countrywide Accounting Fraud
In the year 1969, David Loeb moved to NY from Virginia to begin a home loan and advance organization named as "United Mortgage Servicing." He was joined by his trusted aide Angelo Mozilo. Both shared common dreams of big money and making their presence felt across the nation. The sole owner of the firm, David Loeb had to, under pressure of work, circumstances and colleagues part with half of the ownership. David Loeb and Angelo Mozilo became equal partners of the new firm that they formed, "Countrywide." They began their operations from and opened their new office in California. Angelo Mozilo was a very forceful and opportunistic marketer, and began pushing for contracts in the market aggressively. The organization was chipping away at two fundamental boards; David's NY-based credit exercises and Mozilo's home loan plot trades in the city of California. After they attempted to present open share…...

mla

References

Chomsisengphet, S., & Pennington-Cross, A. (n.d.). Federal Reserve Bank of St. Louis Review, 88(1),(January/February 2006), 31 -- 56.

Freeman, W., Wells, P.A., & Wyatt, A. (2013). Insights from the Failure of the Countrywide Financial Corporation (SSRN Scholarly Paper No. ID 2275772). Rochester, NY: Social Science Research Network. Retrieved from  http://papers.ssrn.com/abstract=2275772 

Karlan, D.S., & Zinman, J. (2013). Long-Run Price Elasticities of Demand for Credit: Evidence from a Countrywide Field Experiment in Mexico (SSRN Scholarly Paper No. ID 2272723). Rochester, NY: Social Science Research Network. Retrieved from  http://papers.ssrn.com/abstract=2272723 

Michael Hudson. (2011, September 23). Mortgage industry tanks, fraud continues at Countrywide. Retrieved December 19, 2014, from  http://www.publicintegrity.org/2011/09/23/6706/mortgage-industry-tanks-fraud-continues-countrywide

Toshiba's response to the scandal was insufficient -- shareholders were protesting months later and many stakeholders did not really know what happened. Toshiba's response was simply to replace a lot of top leadership. The company should have been more forthcoming about the nature of the fraud, so that there was better understanding of the issue. Just as important, Toshiba needed to get in front of the response to the scandal -- the company needed to control the narrative with respect to how it was going to not only investigate but begin the process of repairing the corporate culture.
Accounting fraud cannot be linked strictly to Japanese factors. This was a persistent fraud that occurred over many years, but so was Enron. Accounting fraud of this type is more about organizational culture than national culture. There is no evidence to suggest that there was anything uniquely "Japanese" about this fraud -- it…...

.....pressures that lead executives and managers to "cook the books?"
Although a company's profitability is ultimately only demonstrated in the long-term, short-term perceptions can affect the price of a company's stock which can in turn threaten its ability to thrive in the future. WorldCom was part of the highly competitive telecommunications industry and the desire to show that it was more profitable than its competitors as well as the fact that it needed to show that its recent mergers has been financially worthwhile (a difficult task that can take many years to do) fueled corruption at the company.

What is the boundary between earnings smoothings and or earnings management and fraudulent reporting?

Certain aspects of GAAP (generally accepted accounting principles) actually worked in favor of WorldCom's desire to make the company seem more profitable than it actually was; for example, line costs had to be estimated as profit given that they were not…...

DELL INC. FAUD
Business practices came under fire when America's seventh largest firm Enron collapsed due to unethical accounting strategies. This case triggered a series of unwelcome events where one after the other, large organizations in the U.S. collapsed or run for bankruptcy cover with one case even implicated the infamous Martha Stewart for insider trading. The various deceitful activities of some larger companies resulted in widespread public mistrust of business practices and values. Companies as big as Adelphia, ENON, Global Crossing, Kmart, Qwest communications, WorldCom and Xerox are all under thorough investigation by one of the few reliable authorities, Securities and Exchange Commission (oyal Bank of Scotland). All the aforementioned names were business of international repute that were charged with the unethical act of projecting inflated profits to trick stakeholders and earn higher profits and generate greater revenue from expensive stocks (oyal Bank of Scotland). WorldCom ran for insolvency in…...

mla

REFERENCES

Hess, E. Stark Lessons From The Dell Fraud Case. Forbes. Oct 2010

Goldman, D. Dell settles fraud charges for $100 million. CNNMoney 2010

SEC Administrative proceedings. 2010. Retrieved online from www.sec.gov/litigation/admin/2010/34-63600.pdf

Ethics
There are basically two choices that Chris has. The first is that Chris can increase the allowance for bad debts to account for the possibility that Ender will not be able to pay its obligations. The second choice is that Chris can choose not to make any adjustments for this possibility. The receivable is material, so there are going to be meaningful consequences to the construction company if Ender is unable to pay this debt. Chris has an obligation to ensure that the financial statements for the construction company accurately reflect its financial condition. However, there is the mitigating factor that Chris does not actually have factual evidence of Ender's financial condition, just hearsay ("word on the street").

There are a number of different stakeholders here. The first is Chris; the second is Laurent. They are stakeholders on a person al level, having discussed this situation. The construction company is the…...

mla

References

FASB Topic 310. Retrieved September 29, 2015 from  http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175821014426&blobheader=application/pdf 

Mackey, J. (2005). Rethinking the social responsibility of business. Reason. Retrieved September 29, 2015 from  https://reason.com/archives/2005/10/01/rethinking-the-social-responsi 

McConnell, T. (2014) Moral dilemmas. Stanford Encyclopedia of Philosophy. Retrieved September 29, 2015 from  http://plato.stanford.edu/entries/moral-dilemmas/

Law Is Likely to Affect All of the Following: Audit Committees of Public Company Boards of Directors
According to Sections 201 and 204 of the Sarbanes-Oxley Act (SOX), auditors must report "all critical accounting policies and practices" and the members of an audit committee cannot offer "non-audit services for public company audit clients" (PowerPoint, slide 6). According to SOX Section 303 and 404, company officers are prohibited from influencing auditors and "the auditor shall attest to, and report on, the assessment of internal control made by the management of the public company" (PowerPoint, slide 6).

A study of U.S. Securities and Exchange Commission (SEC) sanctions against auditors before and after the implementation of SOX up to 2010 found that common reasons for auditor failure to detect fraud include "failure to exercise due professional care;" "insufficient levels of professional skepticism;" "inadequate identification and assessment of risks;" and "failure to respond to identified…...

mla

References

Cohn, M. (2011). Congress probes accountants' role in financial crisis. Accounting Today.

Beasley, M. Carcello, J, & Neal, T. (2013). An analysis of alleged auditor deficiencies in SEC

fraud investigations: 1998-2010. Center for Audit Quality. Retrieved from:

http://www.thecaq.org/resources/pdfs/CAQ_deficienciesMay2013.pdf

OlympusThe Olympus case highlights a number of behavioral, ethical and accounting issues. First, the ethics of the case are crystal clear. The two executives of Olympus went to extensive lengths to commit the fraud. It was carefully planned, with multiple steps undertaken over an extensive time period. Viewed through the lens of the fraud triangle, they were in a position (opportunity) as both executives and members of the board to operate with minimal oversight, until Woodford was hired. The had a motive, in that they wanted to disguise the losses that would have been humiliating for the company and that only arose as the result of changes to the accounting rules. Lastly, Kikukawa and Mori had rationalized the fraud as being whats best for the company, though clearly in the long run this was not the case (ACFE, 2018).From an ethical point of view, there is no ability to…...

mla

References

Accounting Tools (2018) the purpose of financial statements. Accounting Tools Retrieved June 27, 2018 from  https://www.accountingtools.com/articles/what-is-the-purpose-of-financial-statements.html 

ACFE (2018) The fraud triangle. Association of Certified Fraud Examiners. Retrieved June 27, 2018 from  http://www.acfe.com/fraud-triangle.aspx 

Sinnott-Armstrong, W. (2015) Consequentialism. Stanford Encyclopedia of Philosophy. Retrieved June 27, 2018 from  https://plato.stanford.edu/entries/consequentialism/

Accounting and Audit Enforcement 1. The Sarbanes-Oxley Act applies to publicly-traded companies. Thus, it does not apply to non-profit entities. Nor does it apply to for-profit entities that are not publicly-traded. This is because SOX was passed specifically to address instances of accounting fraud in publicly traded companies that were undermining consumer trust in the capital markets (101.com, 2018). A publicly traded companies has a variety of different obligations under SOX that will help to reduce the opportunities and incentives for accounting fraud. Both opportunity and incentive are components of the fraud triangle – one needs to have a perceived need to commit the fraud and the circumstances with which to do so (ACFE, 2018).
Non-profit organizations have no obligations under SOX. However, there is a school of thought that holds that non-profit entities can benefit from some of the recommendations and mandates that SOX contains. Fritz (2016) writes that "non-profits are…...

cross examine the accounting fraud scandal that took place at Xerox, the main intention of this analysis is to know the causes and the effects of the scandal as well as the need of a good practice in business ethics, corporate management and the general oversight. Xerox was able to utilize a creative technique of accounting to give false presentation of its assets and liabilities, they also deceive the investors and lastly they were able to inflate their socks. The main players of the scandal were the chairman, CEO and other high ranking officials who took the advantage and enriched themselves (Gara, D. 2004). The high ranked officials made away millions of shillings at the expense of the stakeholders. This scandal highlighted the need for accountability and ethics in the governance of finance as well as corporate.
The analysis also aims to examine the strategic mistakes that led the Xerox…...

mla

Reference

Coenen, T. (2008) Essentials of corporate fraud. John Wiley and Sons. Retrieved on May 25, 2014 www.slideshare.net/divinvarghese/xerox-corporation-fraud-case-982933

Pickett, K.H. Spencer. (2007)Corporate fraud a manager's journey. John Wiley and Sons. Retrieved on May 25, 2014 www.wsws.org/en/articles/2002/.../xero-j01.htm

Gara, D. (2004) Corporate fraud case studies in detection and prevention. John Wiley and Sons. Retrieved on May 25, 2014 www.money.cnn.com/2002/04/11/technology/xerox_fraud

Comer, M. (2003) Investigating corporate fraud. Gower Publishing, Ltd. Retrieved on May 25, 2014 www.i-sight.com/.../xeroxs-accounting-scandal-recovery-tactics

The other two cases looked at errors that were made deliberately by subsidiary management and, in both cases, were both quantitatively and qualitatively material.
Due to the fact that most fraud starts at the bottom, is it very important for executives to always be looking for things that do not appear to be right. Fiscal honesty is crucial in financial markets. It is essential that management quickly resolve any monetary issues that come up. Delay only compounds accounting indiscretions. The consequences to all concerned, the business, its investors and creditors, and administration, are that if things are left unattended they will only get worse.

There is no alternative to good systems of recordkeeping, controls, and oversight. Management cannot be distant and disinterested. Financial reports must be looked at and examined, not just amassed. Discrepancies must be rapidly resolved. Communication of accounting rules and measures must be apparent and timely. Doubts also…...

mla

References

Weinstein, Edward a. (2010). When it Comes to Fraud, it's Better to Be Safe than Sorry. The CPA Journal, p.6-9.

Financial Fraud
What is financial fraud?

Identifying Fraud

Effect on Economy

Are we Protected?

Identity Theft in Business

Enron Scandel

Loss Prevention Planning and Strategies

Financial Fraud

Financial fraud was an unfamiliar notion prior to the 2000's, but has become a controversial and familiar term due to economic woes, public disapproval and revamped financial regulations. Light was shed on some of America's top organizations intentionally changing their accounting books to look more attractive to investors than they were in actuality. Institutions and/or ranking officials at institutions were falsely publishing financial statements with fabricated values and profits presenting the illusion that investments with these entities were producing and would continue to produce consistent returns. In addition to recurring fraudulent activity, new highs for deposits of fraudulent checks were recorded by banks nationwide.

Government agencies aim to set regulations, enforce regulations, and protect American businesses and consumers from fraudulent activity. Laws are set in place to protect against fraudulent activity of all…...

mla

References

Elliott, T.L. (2013). Business ethics perspectives: Faculty plagiarism and fraud. Journal of Business Ethics, 112(2), 91-99.

Laufer, D. (2011). Small business entrepreneurs: A focus on fraud risk and prevention. American Journal of Economics and Business Administration, 3(2), 401-404.

Nikitkov, A. & . (2008). Online auction fraud: Ethical perspective. Journal of Business Ethics, 79(3), 235-244.

Yallapragada, R.R. (2013). Accounting fraud, and white-collar crimes in the United States. Journal of Business Case Studies, 8(2), 187.

Such adjusting entries will help to improve the accuracy of financial statements. Adjusting entries is necessary because accrual accounting systems demand that the events are recorded accurately. They are not to be recorded strictly on the basis of cash transactions, and all of these adjustments serve to translate the accounting figures that arise from the cash accounting to accrual accounting by incorporating all of the different non-cash transactions and ensuring that every element of the income statement and balance sheet is correct.

On a computerized accounting system, there might be software that can actually make these entries. If not they will need to be entered manually into the system.

As with any accounting, there are certain ethical issues that need to be understood. The accrual statements are where we report our profits and losses. It is important that they are completed accurately. Any fraud is illegal and cannot be tolerated. e have…...

mla

Works Cited:

No author. (2012). Adjusting entries. Accounting Coach.com. Retrieved November 29, 2012 from  http://www.accountingcoach.com/online-accounting-course/08Xpg01.html

This would immediately flag the loans going outside their own bank and also provide greater insights into how customers were using funds over time. Another approach is to incent auditors to find fraud and embezzlement and make it widely known in the bank that anyone finding illegal practices would receive a reward up to 20% of the error found. Auditors, who are traditionally not paid that much, would work overtime looking for fraud, hoping to earn 20% of the fraud found, thereby drastically reducing the threat. While this may appear expensive, without this strategy a bank could go for years, losing millions of dollars, if no action was taken.
In the case study, it is apparent that Greater Providence Deposit and Trust auditors were not organized or incented in their job design and rewards to actively seek out embezzlement and fraud. This is a major limitation in the design and…...

mla

References

Kristy Holtfreter, Kevin M. Beaver, Michael D. Reisig, & Travis C. Pratt. (2010). Low self-control and fraud offending. Journal of Financial Crime, 17(3), 295-307.

Eelco R. Van Wijk, & Timothy R. Holmes. (2007). Fraud in the Audit Department. The Internal Auditor, 64(2), 83-85,8.

Joseph T. Wells. (1998). An unholy trinity. The Internal Auditor, 55(2), 28-33.

Accounting and Intrusion Detection
In a report issued by Paladin Technologies, Inc., entitled: "Security Metrics: Providing Cost Justification for Security Projects," 273 organizations were surveyed on the topic of security. The report illustrates in quantifiable terms the depth and reach of intrusion detection on the financial viability of the organization. The combined reported losses from the firms surveyed totaled $265.6 million in 1999. The highest loss categories were reported as follows:

Type of Loss

Estimated Dollar Value

Number of espondents

Theft of intellectual capital

m

Financial Fraud

m

Sabotage

m

The average annual financial loss of firms surveyed was estimated at $40 million. Forty three percent of respondents were able to quantify financial losses, and seventy four percent were able to acknowledge financial loss. Ninety percent detected cyber attacks within the most recent twelve-month period and seventy percent reported serious breaches other than viruses, laptop theft, and employee abuse of net privileges. As for these categories, six hundred and forty three…...

mla

Resources

Risk Assessment risk assessment involves estimating the likelihood and severity of an occurrence, the relative impact of risk on the facility, information handler, processing, support, and the mission of the organization. Assessing the likelihood means determining the probability that existing controls will be skirted. Pfleeger has identified a series of steps for examining the likelihood of adverse occurrences:

Calculate the probability that the risk may happen, found in the observed data for the specific system.

Estimate the likely number occurrences in a given time period. The analyst gives a rating based on several different risk analysis methodologies, and then creates a table to hold and compare the ratings.

The Delphi approach: several raters individually estimate the probable likelihood of an event, combine their estimates, and choose the best one.

The Wirecard Scandal: A Case Study in Corporate Fraud

In June 2020, the German fintech company Wirecard filed for insolvency, revealing a massive accounting fraud scandal that shook the global financial community. As the dust settled, it became clear that the company's financial statements had been grossly inflated, and that executives had engaged in a sophisticated scheme to deceive investors and regulators.

The Scheme

Wirecard's fraudulent scheme involved several interconnected elements. Firstly, the company created fake subsidiaries in Southeast Asia to inflate its revenue and profits. These subsidiaries had no real operations but were used to process fictitious transactions. Secondly, Wirecard used third-party....

One possible essay subject related to case studies for SEC (Securities and Exchange Commission) and ACC (Accounting) could be the recent scandal involving the German fintech company Wirecard. Wirecard was once touted as one of Germany's biggest success stories, but it collapsed in 2020 after it emerged that the company had been involved in a massive accounting fraud.

The scandal raised serious questions about the effectiveness of regulatory oversight by the SEC, as well as the role of auditing firms in detecting and preventing financial fraud. It also highlighted the challenges of regulating the rapidly-evolving fintech industry, which often operates in....

The accounting fraud case involving Olympus had a significant impact on the company's reputation and financial stability. The scandal resulted in a loss of investor confidence and damage to the company's brand reputation. The revelation of the fraud also led to a significant decline in the company's stock price and market capitalization.

Additionally, the scandal had a major financial impact on Olympus, as the company had to pay significant fines and settlements to regulators and investors. The company also incurred substantial legal costs in defending itself against lawsuits related to the fraud.

Overall, the accounting fraud case had a detrimental impact on....

The Olympus Accounting Fraud Scandal: A Damaging Blow to Reputation and Financial Stability

The Olympus Corporation, a renowned Japanese manufacturer of optical equipment, was rocked by a massive accounting fraud scandal that spanned several years and had a profound impact on the company's reputation and financial stability. The intricate scheme involved the creation of fictitious subsidiaries and the use of complex financial instruments to conceal billions of dollars in losses.

Unraveling the Fraud

In 2011, a whistleblower brought the fraudulent activities to light, prompting an internal investigation. The subsequent probe uncovered a web of deceit that had been orchestrated by senior executives and....