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You Can Account On It

You can account on it THE ANATOMY OF AN ACCOUNTING SCANDAL Accounting fraud is simple to understand Any time money is stolen or hidden by an employee it is accounting fraud Over-recording sales revenue or under-recording expenses are both examples of accounting fraud Avoiding disclosure of creative accounting practices can be fraudulent Infamous scandals Why would an employee become involved? LEHMAN BROTHERS Some accounting frauds are started to attain money from unsuspecting investors Big players CEO Richard S Fuld, Jr. & Lehman executives Other times the fraud is started in order to hide errors When Lehman brothers failed: Several civil suits were filed against them; there have not been any prosecutions. Fuld has been keeping a very low profile ever since 26.000 PEOPLE BECAME UNEMPLOYED MILLIONS OF INVESTORS LOST ALL OF THEIR MONEY What happened Lehman Brothers hid over $50 billion in loans by classifying them as sales Auditor, Ernst & Young, manipulated the books by using accounting trick "Repo 105" Repo 105 was a report that was "materially misleading". It temporarily moved $50 billion of assets at the end of each quarter LEHMAN BROTHERS FILED FOR BANKAUPTCY IN 2008- LARGEST BANKRUPTCY EVER REPORTED (bigger than Washington Mutual, GM, Enron and WorldCom combined) ENRON SCANDAL Enron Corporation - an energy company based in Houston, Texas Big players Jeffrey K. Skilling president, CEO What happened Investors lost over $70 billion Trustees and employees lost $2 billion currently serving a 24 year sentence This major misappropriation of investments ultimately caused the bankruptcy of Enron Kenneth L. Lay CEO, chairman FORMER VP OF ENRON, SHERRON WATKINS, REPORTED THE ENRON SCANDAL died from a heart attack during sentencing MAUDEE PUNZI SCHEME Bernard L. Madoff Investment Securities LLC Big players What happened Investors were under the impression Madoff's personal collection of homes, art, and boats was worth an estimated $50 million that the company was worth $64.8 billion $36 billion of investors' money was lost Bernard Madoff serving a 15O-year prison sentence at Butner Federal Correctional Complex BERNIE MADOFF INFORMED HIS SONS ABOUT HIS PONZI SCHEME AND THEY REPORTED HIM TO THE F.B.I. Avoiding the scam Avoid investments that seem Many individuals involved in fraud will seem trustworthy Investors should avoid becoming involved when the terms and/or legitimacy are not easily understood to be "too good to be true," because they usually are Many people involved in fraudulent activities will offer Investors should avoid low-risk, high returns investments investors something free or easy with the expectation to receive something in return (your money!) Sources Presented by;segmentUtilities DEVELOPED BY N NOWSOURCING

You Can Account On It

shared by NowSourcing on Sep 24
This infographic provides a deeper look into some of the most infamous accounting scandals.


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