Accounting Fraud And The Financial Fraud - 1761 Words

Introduction WorldCom CEO Bernard Ebbers, former partner said â€Å"He didn’t know anything about the long distance or telephone business, but he knew how to read numbers, he was a number cruncher.†(â€Å"Inside†) This should have been a warning sign to those investing in the company that Ebbers wasn’t the best choice to run the 2nd biggest telecom company in America. WorldCom was just one of many accounting frauds that took place in the early 2000’s. But unfortunately that trend of dishonest accounting didn’t stop. The reason behind writing this report is to examine the $11 billion accounting fraud the biggest in US history, the collusion between Ebbers and the CFO Scott Sullivan to deceive investors, causing the loss of thousands of jobs and costing investors billions of dollars. Hopefully covering this event thoroughly will make other CEO’s think twice before stealing investors’ money. Getting in over his head: The fraud and the storm tha t followed In 1983 Long Distance Discount Services, Inc(LDDS) was founded in Jackson, Mississippi by Bernard Ebbers and Maury Waldron. Through the 1980’s LDDS purchased many of its competitors throughout the southern United States making it one of the largest Telecom companies in the world. In 1995 Ebbers now CEO changed the name of the company to WorldCom and acquired a much bigger firm MCI in 1998 the largest corporate merger in the US (Lyke 2). One year later WorldCom tried to take over Sprint which would have made it the biggest telecomShow MoreRelatedLegal And Regulatory Environments And Ethics1712 Words   |  7 PagesComponents of a Fraud and Forensic Accounting Curriculum Forensic accounting is defined as the action of identifying, recording, settling, extracting, sorting, reporting, and verifying past financial data or other accounting activities for settling current or prospective legal disputes or using such past financial data for projecting future financial data to settle legal disputes. Forensic accountant are very important part of the business for the expert services, legal system such as financial statementRead 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 MoreUnderstanding Financial Statement Fraud And Financial Statements1730 Words   |  7 PagesUnderstanding Financial Statement Fraud Anna Gallagher American Public Universityâ€Æ' Understanding 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 millionRead MoreFinancial Crimes1610 Words   |  7 Pagesscope of business has expanded through the world, the need to track financial information has grown. There has been a corresponding increase in illegal financial activity according to separate surveys by the U. S. Department of Justice, Pricewaterhouse-Coopers, and the Association of Certified Fraud Examiners (ACFE) (Houck, Kranacher, Morris, Riley, Robertson, Wells, 2006). An understanding of effective fraud and forensic accounting techniques can assist forensic accountants in identifying illegalRead MoreFraud : Fraud And Fraud1551 Words   |  7 Pages Fraud Detection Paper INTRO Fraud has plagued the world of accounting since the establishment of the profession. Fraud can be committed against an individual or a business. 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In addition to SOX, the Accounting Institute of Certified Public AccountantsRead MoreResearching Topics Of Interest Is A Key Starting Point For The Research Effort1538 Words   |  7 Pagessections include the formulation of potential topic areas of interest for my doctoral level research. Earnings Management: An Examination of Ethical Implications, Fraud, and the Related Impacts to Stakeholder Interests The first topic area involves an observation of how managers and accountants currently utilize loopholes in FASB accounting standards to present better earnings results to investors, creditors, and regulatory authorities. Many business professionals support earnings management as routineRead MoreInvestigation Of Financial Statement Fraud780 Words   |  4 PagesInvestigating Financial Statement Fraud Background Financial Statement is the heart and soul of the business industry as it provides the financial condition of the company and the going forward initiatives of the corporation, therefore it is critical that the financial statement is free from manipulation and misstatement to be material and useful for stakeholders and other earning statement users. Goel and Gangolly (2012) implied that top management knows the financial statement users will perceiveRead 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 MoreKey Elements For Commit Fraud1673 Words   |  7 PagesElements There are five elements needed to commit fraud: (1) a false statement containing material fact, (2) the defendant possesses the knowledge that the statement is untrue, (3) the false statement’s intent is to deceive the intended victim, (4) the intended victim justifiably relies on the statement, and (5) the ending result is financial injuries to the intended victim. All false statements do not constitute for fraud; it needs to contain a material fact. The materiality of the statement