According to the author’s viewpoint, many scandals have happened because of the following illegal behaviors. It can be clearly seen from the case that the most obvious scandal is that Tyco’s money has been used for personal expenses. CEO Kozlowski was accused of using corporate funds to illegally purchase precious artworks, residences, and properties. More importantly, Kozlowski used Tyco’s $1.5 million to pay for his second wife’s birthday week (Stanwick & Stanwick, 2009). Another unethical action that suffers complaining from many critics is that Kozlowski, together with some other members of Tyco’s management, have received unreasonably high compensation levels, which contributed to the fall of Tyco’s stock (Stanwick & Stanwick, 2009).
Ethicality of Accounting Activities Ethicality of Accounting Activities The case involving WorldCom, a telecommunications company, was one of the biggest accounting scandals to happen in the US. The company filed for bankruptcy in 2002 after an internal auditor, Cynthia Cooper, discovered discrepancies in the accounting data. After a complete audit with a team, Cynthia found that the discrepancies were fraudulent and unethical. More than one department in the company played a role in covering up the accounting activities that were not ethical or legal. Accounting Activities in Detail The key accounting activity in the case dealt with incorrect journal entries for capital expenditures.
This fraud was thought to have cost clients more than $10 billion. Like other Ponzi scheme models, Madoff attracted investors with a promise of high returns, which initial paid out from subsequent investments rather than from legitimate profits made from initial investment. Because of these fact, the scheme can last only as long as the perpetrator is able to attract an increasing number of investors, all of whom expects very high returns. Madoff lived a wealthy lifestyle by skimming money from the significant cash flow generated by the fraud. Another aspect of this case involved the role of government regulations.
, Walton, who died in April 1992, had built Wal*Mart into a phenomenal s u c c ~ with a 2 0 - par , a venge return on equity of 3376, a nd compound average s a l e growth of 35%. At the end of 1993, WalSMart had a market value of $57.5 billion, and its sales pcr square foot were nearly R O O, c ompard with the industry average of $210. It was widely believed that WalDMart had revolutionized many aspedv of retailing, and it was wcll known for its heavy investment in information technology. David Class and Don Soderquist faced the M e r g e of following in Sam Walton's footsteps. Glass and SoderquLt, CEO a nd COO, had been running thc company since February 1988, when Walton, retaining tlic chairmanship, turned the job of CEO over to Glass.
Final Paper Candice Blair University of Maryland University College PRPA 601 Turnitin score: There are few betrayals worse than mishandling money that someone has entrusted to you. Imagine the damage control needed when institutions whose purpose is to manage others’ money, mishandles the finances of millions of people. In 2012, the financial world was shattered with the implosion of one of the world’s banking giants, JP Morgan Chase & Co. (JPM). Due to a complex trading portfolio that was dubbed the “London whale”, which amounted to over $6 billion in losses, JPM was accused of misleading its investors in order to boost profits, but asserted that they (JPM) were acting on the best information that they had at the time. A lengthy investigation and several hearings pressed JPM leaders on their trading practices.
Enron had many legitimate sources of income like natural gas, etc. But as they started to lose money in various areas, some of the stock was later made up and billions of dollars were non-existent! I believe that reasons for Enron on keeping the fraud going for an extensive time is that because there were no strict rules and because of deregulation of buying and selling of the company’s wealth. Ken Lay created multiple non-existing companies of partnership and hid the truth of where the money was. People thought these very companies were worth a fortune but because they were completely made up, they didn't have any value!
Considered a white-collar crime, Mr. Madoff broke the law and deceived clients and investors in order to amass millions of dollars. The ethical issues came about when Mr. Madoff utilized his new investors’ money to pay off the earnings of his existing customers, instead of actually investing the funds he received from his new investors. In an effort to keep the scheme going Mr. Madoff was on a constant quest to gain new investors. Although Mr. Madoff’s legitimate business was not based off of fraud, according to the reading, there is evidence that he occasionally injected funds from his illegal business into his legal one during times of low revenues (Ferrel, Fraedrich, Ferrell. pg.
The SEC charged Lucent for misrepresentation of accounts and misguiding investors. The SEC alleged that Lucent fraudulently recognized $1.148 billion in revenues and $470 million in pre-tax income. The SEC also claimed Lucent did not cooperate with its investigation and misled the public about the investigation. Lucent, in 2004, paid a $25 million fine, consented that it violated federal securities laws, used poor internal controls and maintenance of books and records. Lucent violated the revenue recognition principle and the full disclosure principle.
This was considered to be one of the biggest corporate bankruptcies of all time, and it stunned virtually everyone in the financial world. Investors were left out in the cold, with millions losing their life’s savings in addition to their retirement funds and pensions. Analysts were dumfounded after news of the fall of a company whom they recently validated as a ‘strong buy,’ dominated the airwaves. There was speculation that several of its top corporate executives could possibly spend time in jail for their involvement in sophisticated fraudulent account schemes, something that later occurred. During the mid to late nineties, Enron Corporation began to grow at an unbelievably rapid pace.
Unethical Behaviors of Fannie Mae Deana Deming ACC/291 December 19, 2012 Sam Adelusimo Unethical Behaviors of Fannie Mae Unethical behaviors happen more often than people think. Fannie Mae is a huge mortgage lending company known for recent unethical behavior. The senior executives manipulated financial statements to collect millions of dollars in undeserved bonuses and to deceive the investors ("Nbcnews.com," 2012). This unethical behavior became a national news story. This company clearly did not follow the Generally Accepted Accounting Principles put in place by the Securities and Exchange Commission or SEC.