The situation at Tyco was an example of greed and excess‚ with little to no oversight and shady accounting practices‚ followed with a dose of incompetence and gross stupidity amongst the board members. The changes that had to been performed came out of necessity for the survival of the company’s reputation and not it’s financial status. The fact that
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“Accounting did not cause the recent corporate scandals‚ unreliable financial statements were the results of management decisions‚ fraudulent or otherwise”. (Lin & Wu‚ 2006‚ para. 5) Waste Management‚ HealthSouth‚ Enron‚ Satyam and Madoff are just a few names that come to my mind when I think of fraudulent accounting. Disguised loans‚ inflated income‚ improper accounting and misstated earnings‚ different words all describing the same thing‚ FRAUD. Fraud affects the company‚ the consumers
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References: Ferrell‚ O. C.‚ Fraedrich‚ J.‚ & Ferrell‚ L. (2007). Business Ethics: Ethical Decision Making and Cases (7th ed). Boston: Houghton-Mifflin. Hein‚ K.‚ & Cassidy‚ H. (2002). As Big Scandals Mount‚ Experts Say Be Truthful--and Careful--in Ads. Brandweek. Article. Retrieved from EBSCO HOST: Business Source Complete.
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CASE 3 : Accounting Fraud at WolrdCom Table of Contents Introduction....................................................................................................................... 1 Question 1 .......................................................................................................................... 2 Question 2 .......................................................................................................................... 4 Question 3 ..........................
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The Accounting Scandal of HealthSouth HealthSouth Corporation is based in Birmingham‚ Alabama‚ it is the largest provider of rehabilitative health care services. It operates in 26 states in the United States of America and in Puerto Rico. HealthSouth provides rehabilitation hospitals‚ long term heightened care hospitals‚ outpatient rehabilitation satellite clinics and home health agencies. HealthSouth was found by Richard Scrushy in the year 1984 and was called
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information and made improper financial transactions. Accounting firms helped conceal the illegal nature of these actions‚ which undermined investor confidence in the stock market and corporate governance in general. The corporate scandals that emerged in 2001 involved Enron‚ WorldCom‚ and the accounting firm of Arthur Andersen and were of national importance. Congress responded to these elaborate white-collar crimes by enacting the Public Company Accounting Reform and Investor Protection Act‚ also known
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The Sarbanes-Oxley Act of 2002Introduction2001-2002 was marked by the Arthur Andersen accounting scandal and the collapse of Enron and WorldCom. Corporate reforms were demanded by the government‚ the investors and the American public to prevent similar future occurrences. Viewed to be largely a result of failed or poor governance‚ insufficient disclosure practices‚ and a lack of satisfactory internal controls‚ in 2002 George W. Bush signed into law the Sarbanes-Oxley Act that became effective on
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not the case‚ a large part of Enron’s profits were made of paper. This was made possible by masterfully designed accounting and morally questionable acts by traders and executives. Deep debt and surfacing information about hiding losses gave the company big problems and in the late 2001 Enron declared bankruptcy under Chapter 11 of the United States Bankruptcy Code. The Enron scandal‚ revealed in October 2001‚ eventually led to the bankruptcy of the Enron Corporation‚ an American energy company
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recording $5‚500 that were received from a customer and planned to steal the money to buy a new cell phone for himself. This action is an example of error. a. True b. False 2. What key piece of legislation was passed in response to corporate accounting scandals by Enron‚ WorldCom‚ and others? a. Sarbanes-Oxley Act. b. 1933 Securities Act. c. 1934 Securities Exchange Act. d. Regulation Fair Disclosure. 3. Internal controls represent plans to: a. Safeguard the assets b. Continually improve the efficiency
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The partners split in 1918 and the firm became Arthur Andersen. Mr. Andersen was a man with a mission; he wanted to create an organization that was more than “just another accounting firm‚” but to be honest and to “think straight and talk straight”‚ a phrase Mr. Andersen learned in childhood (Carnegie‚ 2005). His death in 1947‚ and succession by Leonard Spacek‚ led to a period of very successful times for the firm. The first
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