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A month earlier, the company's internal auditors discovered over $3.8 billion in illicit accounting entries intended to mask WorldCom's dwindling earnings, which was by itself more than the accounting fraud uncovered at Enron less than a year earlier. [109] Ultimately, WorldCom admitted to inflating its assets by $11 billion. [110]
A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return.
Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.
Common law liability arises from negligence, breach of contract, and fraud. Statutory law liability is the obligation that comes from a certain statute or a law, which is applied, to society. Recoveries from these liabilities vary by their source or “theory”. Some of these theories are:
Generally Accepted Accounting Principles (GAAP) [a] is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), [1] and is the default accounting standard used by companies based in the United States.
A new and novel technique called System properties approach has also been employed where ever rank data is available. [6] Statistical analysis of research data is the most comprehensive method for determining if data fraud exists. Data fraud as defined by the Office of Research Integrity (ORI) includes fabrication, falsification and plagiarism.
The accounting equation is a statement of equality between the debits and the credits. The rules of debit and credit depend on the nature of an account. For the purpose of the accounting equation approach, all the accounts are classified into the following five types: assets, capital, liabilities, revenues/incomes, or expenses/losses.
The KPMG tax shelter fraud scandal involved illegal U.S. tax shelters by KPMG that were exposed beginning in 2003. In early 2005, the United States member firm of KPMG International, KPMG LLP , was accused by the United States Department of Justice of fraud in marketing abusive tax shelters .