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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. [111] Ultimately, WorldCom admitted to inflating its assets by $11 billion. [112]
SAS 99 defines fraud as an intentional act that results in a material misstatement in financial statements. There are two types of fraud considered: misstatements arising from fraudulent financial reporting (e.g. falsification of accounting records) and misstatements arising from misappropriation of assets (e.g. theft of assets or fraudulent expenditures).
Peregrine Systems [8] [10] corporate executives convicted of accounting fraud; Phar-Mor [8] company lied to shareholders. CEO eventually sentenced to prison for fraud and company eventually became bankrupt; Qwest Communications [10] RadioShack CEO David Edmondson lied about attaining a B.A. degree from Pacific Coast Baptist College in California
The fraud was uncovered in June 2002 when the company's internal audit unit led by unit vice president Cynthia Cooper discovered over $3.8 billion of fraudulent balance sheet entries. Eventually, WorldCom was forced to admit that it had overstated its assets by over $11 billion. At the time, it was the largest accounting fraud in American history.
The Enron scandal was an accounting scandal sparked by American energy company Enron Corporation filing for bankruptcy after news of widespread internal fraud became public in October 2001, leading to its accounting firm, Arthur Andersen, then one of the five largest in the world, dissolving. In addition to being the largest bankruptcy ...
The Olympus scandal was a case of accounting fraud exposed in Japan in 2011 at optical equipment manufacturer Olympus.On 14 October, British-born Michael Christopher Woodford was suddenly ousted as chief executive.
Arthur Andersen LLP was an American accounting firm based in Chicago that provided auditing, tax advising, consulting and other professional services to large corporations. By 2001, it had become one of the world's largest multinational corporations and was one of the "Big Five" accounting firms (along with Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers).
"McKesson and Robbins Case." In History of Accounting: An International Encyclopedia, edited by Michael Chatfield and Richard Vangermeersch. New York: Garland Publishing, 1996. pp. 409–410. Full-text; John C. Coffee, Gatekeepers: The Professions and Corporate Governance Oxford: Oxford Univ. Press (2006) ISBN 0-19-928809-7 pp. 139–140.