Nonprofit Goals

Nonprofit Goals
Hi Everyone,
As you are aware, our nonprofit goals include using genomic sequencing and analysis for the
advancement of education, scientific research and improving social welfare. This requires us to
utilize crowdsourcing to fund our efforts.
We are making progress towards these goals daily and this report is to let you know what Open
Genomes has accomplished in the past few weeks, some issues we addressed, and the next steps we
need to take in order to move forward.
Earlier this year we received a determination letter from the IRS that awarded our organization
501(c)(3) status. This milestone was the beginning of extensive research into State and Federal legal
implications. We researched the registration requirements for each ... Show more content on
Helpwriting.net ...
Not only does Guidestar.org have over 100,000 registered non–profit organizations that share
information, but it also contains records for all US 5010(3)(c) tax–deductible organizations, whether
they have completed their listings or not. We uploaded our Form 1023 tax–exempt status
applications, financial statements, and other information to get a "Guidestar Silver Participant"
recognition.
http://www2.guidestar.org/organizations/46–2725903/open–genomes–foundation.aspx
We experienced some accounting hurdles from the early days regarding volunteer contributions vs.
loans and how we should report these to the authorizing governing bodies. Additionally, Ted needed
a new modem for his internet connection (his old modem was very outdated, causing connection
problems, and an upgrade was recommended by the internet provider), and a new graphics card to
upgrade from EGA so that he could see his screen. Open Genomes Foundation expensed the modem
and graphics
... Get more on HelpWriting.net ...

Corporate Fraud Has Taken The World By Storm For Over The...
Corporate Fraud
Introduction
Overview Corporate fraud has taken the world by storm for over the past decade. The biggest fraud
cases to ever occur happened in 2001 and 2002 and since then fraud seems to be more and more
common around the world. According to Forbes.com (n.d) the biggest fraud cases to ever occur was
Enron, Bernard Madoff, Lehman Brothers, and Cendant, with Enron being the largest accounting
scandal to ever take place. Prior to Enron's fraud scandal coming to light in 2001, they were the
seventh largest company in the United States by revenue, this was the same year Enron filed
bankruptcy (da Silveira, 2013, p. 315). In addition to being one of the largest companies, Enron
received numerous awards for their positive business role. Enron received the award for being the
most innovative company from Fortunes magazine, ranking Enron as one of the most admired
companies. Enron received this award six year in a row by the year 2000 (da Silveira, p. 316).
Furthermore, in 2001, Enron was noted on the United States list of being the largest company of the
top 50 fastest growing companies (da Silveira, p. 316). Not only did Enron receive awards as a
company, but their Chief Finance Officer (CFO), Andrew Fastow also received the award as the
most creative CFO from CFO Magazine in 1999 (da Silveira, p. 316). According to da Silveira,
Enron was considered a high–profile company and viewed as a role–model company by other stock
analysis, investment analysts,

The Financial Information And Its Users
In today 's world of accountability and innovativeness, there is much more need of ensuring there is
efficient as well as effective technique of classifying, recording and identifying important financial
data to make decision making process as easy as possible. There is developing necessity that entails
gaining as well as upholding competitive advantage following stiff competition enabled via effective
financial performances. Thus, it can be undertaken that accounting functions under social –
economic environment, hence becoming unavoidable ultimately creating the need for systematic
accounting theory and practices. It is as well necessary to note that at the moment, there have been
cases of creative accounting which entail the aspect of ... Show more content on Helpwriting.net ...
Preparation of the financial reports used by the external users of the financial information entail
going through a given accounting cycle process (Martínez and Lin, 2014 p. 245). It all starts by
recording various financial transactions as they take place in the prime books or books of original
entry. The data in the books of original entry is therefore posted to the respective ledgers, which
therefore after being balanced; the balances carried down are transferred to the trial balance. From
the trial balance, the final accounts are drawn. These final accounts include the income statement,
statement of the financial position and statement of cash flow among others. All these final financial
statements represent different accounting information that communicates the situation of the
financial welfare for a given entity in a given period. Thus, it is a requirement that every company
discloses its financial information to the public via publication to enable all the interested parties to
make an informed decision.
According to Morrissey, Meyrick, and Berry (2013 p. 149), management accounting includes that
aspect of classifying and recording the financial information at the discretion of the management to
assist them in carrying out their managerial functions. For instance, the budget

The Auditor and Fraud
EXPLAIN THE RESPECTIVE ROLES AND RESPONSIBILITIES OF MANAGEMENT AND
AUDITORS IN THE PREVENTION AND DETECTION OF FRAUD.
The primary responsibility for fraud detection lies with management. This arises due to a contractual
duty of care. Directors are able to discharge their duty toward prevention and detection of fraud and
error in many ways, for example: * Complying with the Combined Code on Corporate Governance
* Developing a code of conduct, monitoring compliance and taking action against breaches *
Emphasising a strong commitment to fraud prevention. This involves establishing a culture of
honesty and ethical behaviour within the organisation with clearly communicated policies. *
Establishing an internal audit function ... Show more content on Helpwriting.net ...
Typical rationalisations include:
I am only borrowing the money and will pay it back
Nobody will get hurt (perception of fraud as "victimless" crime
The company treats me unfairly and owes me
Its only temporary until my financial position improves
Everybody's at it!!
The extent to which individuals appear to be motivated by greed. Again, a difficult characteristic to
assess but the individual's concern with money and consumer goods may provide some clues about
this. If someone starts turning up to work in a brand new Ferrari, they may have won the lottery, or
benefited from the demise of a loving relative, or they could be up to no good!!
The degree of loyalty exhibited by an individual. If the individual has been with one firm a long
time, this may indicate a certain level of satisfaction with their employment and perhaps reduce the
likelihood of them committing fraud. You should, however, also be aware that experienced
employees, because they are trusted, might have a greater opportunity to commit fraud. Ernst &
Young Survey (2000) found that nearly half of the employees who defrauded their firms had been
employed for over five years. Also bear in mind that opportunities to commit fraud can arise when
an employee reaches a level of trust in an organisation or when internal controls are weak or
nonexistent. Then the employee if he or she is so motivated will perceive that there is an opportunity
to commit fraud, conceal it, and

Acc 556 Week 1
Internal Accountant's Report to Management
| |Accountant |
Memo
To: Management
From: Internal Accountant
Date: 10/8/2011
Re: Government Bid
Occupational fraud is defined as the use of a person's job for individual enrichment through the
purposeful mishandling or misapplication of his or her employer's capital or assets (Wells, 2005).
Occupational fraud can have a serious impact with far–reaching consequences. In 2004 for the
Association of Certified Fraud Examiners (ACFE) conducted a survey that provided 508 usable
studies of fraud for a total of over $761 million ... Show more content on Helpwriting.net ...
The final category is conflict of interest. A conflict of interest occurs when an employee has an
undisclosed economic benefit in a situation. For example, maybe the employee has a family member
who works for one of the companies bidding on a project. If the employee knows that the family
member will benefit and does not disclose the information to his superior than that is a conflict of
interest. To begin the review process there should be some knowledge of the processes and
procedures in the accounting department. It may be a good idea to observe all of the procedures that
go into creating the financial statements. Look for any weaknesses or questionable practices and
create a list of questions. Then in the next phase the auditor can conduct interviews to get a better
understanding of the accounting staff. Observations and interviews can set the groundwork and
provide information into any nuances or potential fraud or abuse. Any material weaknesses found
can be further explored. Another recommended method for completing a status review is to work
back from the financial statements. Make sure that all balance sheet accounts are properly
documented and choose a handful of transactions to verify. In verifying the transactions it is
important to look at the original documentation for each transaction. It is important to ensure that all
of the documentation is accurate and complete. If there are missing

Essay On Enron Fraud
A once massive communications company was brought to ruin by the mishandling of DIRECTORS,
OFFICERS, and the CEO. Between 1999 and 2002 the CEO Bernie Ebbers orchestrated over $9
billion worth of fraudulent accounting transactions. Surely all of this was not accomplished by just
one man, this took teams of people who were unwilling to question authority or stand up during
times of corporate wrong doing. Therefore, the information to follow will contain explanation of
how this fraud was committed and by whom, the reasoning behind the fraud, the consequences of
their actions for them and the corporation, and the final outcome for the corporation and those
directors and officers held accountable. According to the Report of Investigation by the special
board of directors for WorldCom the accounting fraud was a number of unsupported and false
accounting entries. During the investigation key witnesses were unavailable for questioning and
accounting documentation was either nonexistent or piled on the floor of the storage area. This type
of disorganization made it merely impossible to conduct any formal audit. Interestingly, the auditor
in charge over the course of this fraud was Arthur Andersen who also conducted audits for Enron
another company corrupted by fraud. Mr. Ebbers was indicated to be the main person in charge of
the fraudulent accounting transactions. Through the course of this artifice, there were several other
employees and officers involved; however, the focus

Accounting Is The Most Boring
Accounting is commonly depicted as the most boring, yet reliable profession possibly offered in the
business school. But what if accountants managed to scam millions? How about billions?
Accounting is a seemingly innocuous career, but corporations can manipulate their current financial
state and become more appealing to investors with some clever help from their accountants.
Accountants could embellish financial statements or secure higher balances for wage expenditures.
A typical corporate mistake is improperly segregating duties of employees. If someone has more
than one task, such as recording inflow of cash and controlling where it goes, then a chance of
embezzlement can occur. Embezzlement is when an employee, usually under good faith, takes a
small sum of money to pay personal finances under the guise of paying it back, but does it so often
that they eventually get caught by an increased amount of missing cash. The SEC, Securities and
Exchange Commission, carefully monitors these conniving, dishonest businesses. To enhance the
duties of this agency, President Bush in 2002 signed the Sarbanes–Oxley Act, which dictated that
publicly traded companies must maintain adequate internal control systems. Despite the strong
reinforcements of regulating agencies such as SEC commissioners and auditors, corporations still
manage to circumvent the proper accounting techniques that prevent fraudulent behaviors. Because
of the consequences observed from the Enron and WorldCom

Acc 556 Week One Memo
Jacqueline Tate–Tafoya
ACC/556
June 18, 2012
Laurie McBroom
MEMORANDUM TO: Management, JTT Accounting Firm FROM: Jacqueline Tate–Tafoya, CPA
DATE: June 18, 2012 SUBJECT: Internal Accountant's Report Per management's request this
document has been prepared to assist in determining if a full financial status review of the recent job
bid is necessary. Fully understanding and preparing for possible issues is vital to our organization's
success. Several key points and issues should be reviewed prior to entering into any contracts. The
following information will be discussed in this memo: 1.) The impact of occupational fraud and
abuse on the company, 2.) ... Show more content on Helpwriting.net ...
(Wells, 2011, p. 241). Bribery can come in many different forms but generally is defined as an act in
which something of value is offered, given, received or solicited with the intent of influencing an
official act. Illegal gratuities can be similar to bribes except these are usually given as a reward.
Economic extortion is basically the demanding of money. "A conflict of interest occurs when an
employee, manager, or executive has an undisclosed economic or personal interest in a transaction
that adversely affects the organization." (Wells, 2011, p. 242). These are not all corruption schemes
that exist but have been determined to be more common than others and ones that should definitely
be watched for when completing an audit or a full financial status review.
Recommendation of types of accounting evidence and methods of gathering such evidence to
support the financial status review
Not all evidence is the same nor does it hold the same value in a case or trial. Evidence is defined as,
"Anything perceptible by the five senses and any species of proof–such as testimony of witnesses,
records, documents, facts, data or concrete objects..." (Singleton and Singleton, 2010, p. 214). In
order to be valuable and legally acceptable evidence must be relevant, material. To hold relevance is
to be able to establish a fact. An example of relevant evidence is one's motive. If evidence shows
that someone has something to gain then they have motive and the evidence is

Statement Of Purpose For Financial Management Accounting
Financial Management Accounting has been developing since the evolution of International
Financial Reporting Standards. The significance of highly qualified management accountants is
crucial for public and private enterprises, developing countries, startups, and others. Personally, I
have chosen Oulu University and Financial Management Accounting due to several reasons that are
based on my experience and motivation. I am a competent candidate for applying to study in
Financial Management Accounting Master's Degree program at Oulu University. The first reason of
applying is to develop the most essential set of skills in order to produce the best results possible.
Some individuals claim that education is an ongoing process from birth till death. It sounds a bit
ruthless, but this is a true claim. The general objective of a management accountant is to provide
decision–making information in a certain economic situation; provide justification for a price
increase, forecast and plan different financial results. Therefore, the data that is provided should be
maximum accurate, well–prepared and ... Show more content on Helpwriting.net ...
For instance, academic mobility by Ministry of Education program is one of them. I have studied at
Warsaw University, Poland (28 ECTS). The selected subjects were in Accounting and Economics:
Accounting, Strategic Accounting, Taxation, Trade Policy, Family politics. Another personal
accomplishment is an acquisition of LCCI Business English Certification for managers. This
qualification helps me to write business letters and build efficient communication at work. At
college and university, I participated at some scientific conferences. One of my themes was «The
benefits and drawbacks of the WTO integration into Kazakh economy». This additional experience,
which had been received from different institutions, will support my successful completion of
Financial Management Accounting

Ceo Duality Causes Conflict Of Interest As Management
served as board chairs, as CEO duality causes conflict of interest as management may override
controls (p.4221). Likewise, the research by Giroux (2008) on Enron accounting scandal revealed
motivations involves key executive's greed, weaknesses and lack of ethics on the accounting
standard, energy deregulation, auditors independence, law firms and investment bankers lack of
independence, neglected board of directors, lack of regulatory control and oversight, as well as
political and influential connections and practices (p.1226).
The research by Weld et al. (2004) claimed that the analyst and the market pressure to meet revenue
expectation, leads managers to engage in fraudulent recognition of revenue practices and cited SEC
Chairman, Arthur Levitt concerns that the drive of meeting analyst expectation pressure corporate
managers, analysts and auditors override ethical business practice (p.45). Nonetheless, the research
by Vogel (2001) blamed Cendant's compensation policy of stock–options tied to the company's
performance potentially caused fraud (p.409). Consistent with the research by Ball (2009)
mentioned that some commentators blaming the stocked option employee compensation package
and performance–based incentive compensation to offer additional motivation for accounting fraud
(p.285).
The research by Ball (2009) also indicated the cause of the accounting scandal stems from
accounting practices to manage earnings, where managers intervene in the reporting of its

Internal Accountant's Report to Management Essay
Internal Accountant's Report to Management It is my opinion that a full financial status review
would be in the best interest of the Company. We have taken pride in the fact that we qualify for
Government contracts. We should not let anyone else find any fault within our Company. In
conducting such a review, we would be able to thoroughly examine aspects of not only our control
systems but our personnel and practices. Through a full financial status review we will also be able
to determine if there is any fraud or abusive actions being enacted against the Company.
Occupational fraud is "the use of one's occupation for personal enrichment through the deliberate
misuse or misapplication of the employing organization's ... Show more content on Helpwriting.net
...
Both of these governing bodies educate auditors, company executives and accountants on how to
effectively handle the risk of fraud but to deter it as well. It has been researched that corruption
schemes, a common type of fraud, were far less common than other fraud cases, such as, asset
misappropriations, however, they were more costly. There are four types of corruption schemes:
bribery, illegal gratuities, economic extortion, and conflict of interest. Three of these schemes
bribery, illegal gratuities, and economic extortion cases all bear a great deal of similarity in that they
all involve an illicit payment from one party to another, either to influence a decision or as a reward
for a decision already made. (Wells, 2005) Bribery is an unethical or illegal business transaction.
Bribery is a form of buying favoritism and it closely associated with politics. It can be broken down
into two broad categories; kickbacks and bid–rigging schemes. A kickback is the seller's return of
part of the purchase price of an item to a buyer or buyer's representative for the purpose of inducing
a purchase or improperly influencing future purchases. Bid–rigging is considered an illegal
conspiracy in which competitors join to artificially increase the prices of goods and/or services
offered in bids to potential customers. It may also include carving up the potential business between
the

The nature, incidence and ethical issues of creative...
The nature, incidence and ethical issues of creative accounting
1.1 Introduction
Creative accounting is also called "Earnings management" which is known as the manipulation of
financial information. The term can be defined in many ways. Initially we define it as 'a process
whereby accountants use their knowledge of accounting rules to manipulate the figures reported in
the accounts of a business ' (Naser, 1993, p.59).
Creative accounting, at root, is the origin of numerous accounting frauds. Many accounting scandal
cases (like the scandals in Enron, WorldCom, and other firms) in the past few years had happened
with the result of collapse. Most of these scandals were conducted by the senior management of
organisations and many victims ... Show more content on Helpwriting.net ...
Therefore, managers or directors mean to depict good performance and position by manipulating
figures hence in such way the stakeholders will be shown positive indicators from the financial
statements. By this way, investors will more likely to be attracted and given confidence with this
superb financial report. This can be achieved by modifying the figures in the statements using the
tricks of creative accounting. In addition, how many bonuses directors will receive in a year may
base on the percentage of the profit reported (Shafren, 2009). For this reason of their private interest,
directors may manipulate financial figures to meet their desire. Lttner, Larcker and Rajan (1997)
have the same perspective. They illustrate that when the directors or managers private interest (such
as stock options and bonuses) is rely on the performance of the company, they are more likely to use
creative accounting to manipulate the figures in order to achieve their favourable results.
Another motivation of creative accounting is the positive effect that the income smoothing brings to
the valuation of security and reduces the risk for the analyst. "Where management observes a gap
between analysts' expectation and the actual performance of the company and when major capital
market transactions are being expected"

Case Study : The Top Management Team
Toshiba seemed to be a very successful company with high profits for about seven years in a row.
However, during this time a scandal was occurring where the upper management team members
pocketed millions of dollars. Toshiba practiced unlawful accounting practices and over estimated
their future profits. This scandal is an example of improper use of internal control and the misuse of
the path–goal theory by over stating goals, which management knew employees would not be able
to accomplish without using some type of loophole to top management benefits.
This scandal started in 2008 and was exposed in 2015, according to Investopedia (2015), all under
two different CEOs. Over a course of seven years, Toshiba over estimated their profits by $1.2
billion and carefully rearranged their loses and expenses so they would not count against them
(Boyd, 2015. Carpenter, 2015). The top management team would "set impossibly high profit target,
... called 'challenges'" and made sure that all the mangers understood how important it was to meet
these goals, otherwise the company would be "under–performing" (Boyd, 2015).
Some might question why the employees of Toshiba did not come forward and say anything about
the new and impossible "challenges" they were being required to meet. This question is easily
answered when one looks into the organizational culture of Toshiba and Japan's work culture. As
explained in J. Boyd's article, one of their strongest employee's values is "loyalty to the

Worldcom Case Summary
I learned some new things from the case article that were not mentioned in Cynthia Cooper's book
titled Extraordinary Circumstances. However, the gist of it was the same. I will focus my paragraphs
based on the three questions.
What are the pressures that lead executives and managers to "cook the books?" There are several
factors that can come into play. For WorldCom, it started with the deterioration of the industry in
2000. This was due to overcapacity, heightened competition, the economic recession, the dot–com
bubble collapse, and a reduced demand for telecommunications services. All of these factors put
extra pressure on WorldCom's most important performance indicator, the expense–to–revenue ratio.
The company was so concerned about keeping it above 42% that they were willing to do anything,
even commit fraud. Bernie Ebbers told the senior staff that they would lose everything if the
company did not improve its performance.
This leads into my second pressure, which deals with personal lives. Employees were receiving
tremendous benefits due to the company's great performance. However, if the company did not
improve, people's salaries would be cut or even worse, their jobs would be cut. That is why so many
people were willing to engage in the fraud, because they felt WorldCom was supplying a salary and
benefits that other companies would not be able to match. Betty Vinson was a prime example. She
knew that releasing line accruals was wrong, but needed to

Review of Shah, A. K., (1998) Exploring the influences and...
In recent years, the practice of creative accounting by the management of large listed corporation in
the UK has received increasingly more attention and allegations, especially from key financial
information users. Supported by significant evidence of the practice of creative accounting, it is
largely believed that such practices misrepresent the underlying reported financial performance of
firms, instantaneously conflicts key core aims of accounting – to provide consistent and comparable
information to users.
Author Atul K. Shah, in his study aims to illuminate the influences and constraints on creative
accounting providing new insights of understanding financial reporting. The dominant purpose of
this paper is to identify the key ... Show more content on Helpwriting.net ...
Bearing in mind the prevailing issue of creative accounting, one cannot help but to question the
accuracy of the data, be it to a small degree, presented in data sources such as prospectuses and
annual reports. It is fair to say that the evidences presented in for example table 4 and 5 give a
logical support to the assertions and observations made by the author.
Overall, I believe the author has been successful in terms of providing the reader an understanding
and depths as to what are the key drivers behind the use of this practice. The paper lightly attempts
to outline an important question – why or for how long these motivators and constraints support
creative accounting schemes appear to go undetected. Shah (1998) concluded that despite Tesco
pursuing similar policies to that of Burton, it had a healthy underlying performance and so had
fewer repercussions on the firms. Consequently, it does not only identify and state factors and
answer his own questions pertaining to the title of this paper, but also infers logically from the
evidence that it's a combinations of a strong mix of the UK financial reporting environment as an
explanation to why the concept flourished in the 1980's. Shah (1998) defines this environment as
where accounting numbers are important, management are powerful, and auditors, press and
analysts were weak and inconsistent in restraining

Summary: Outsourcing Tax Returns
Processing tax returns is now an easy task for businesses and individuals who do not have the time
to do it themselves. This is through the presence of firms that offer such service as outsource tax
return. There are now a lot of accounting firms that handle outsourcing tax preparations such as tax
returns for whatever reason a business or an individual has in not being able to handle them.
However, the most common reason on seeking out this type of outsourcing service is the reduction
of overhead costs that could be entailed for the recruitment and training of staff to handle this
process. It is definitely for you and your business in soaring to greater heights, abundance and
success. To be able to survive the tough industry of the business world.
It Is Practical
You are using workforce away from your establishment or office. It's so practical, and convenient.
Imagine, in just a few seconds, you will be able to transfer information in any part of the world. The
time zone difference gives the U.S. accounting firms an advantage. Upon leaving work during the
night, overseas accountants are now in charge in working on the information delegated to them.
Upon return in the morning, you will find all your accounting work ... Show more content on
Helpwriting.net ...
You would be able to use this time for the improvement of the systems of your business or for
bettering the products or services that you are offering to your customers. Another thing about is that
you will be offered with flexible options when it comes to meeting the requirements of the
processing of your tax returns. With this, you will be assured that all aspects that you need for your
tax returns will be complied with. With firms offering outsource tax return service, you will also be
guaranteed that your tax data will remain confidential and

Can Corporate Governance Mechanism Prevent Corporate Fraud?
CORPORATE GOVERNANCE ESSAY
Can Corporate Governance Mechanism Prevent Corporate Fraud?
Executive Summary
This paper will reviews the extent to which corporate governance acts as efficient tool to protect
investors against corporate fraud, thus contributing to summarize the literatures on role of corporate
governance on preventing occurrence of corporate fraud. In a more recent study, corporate fraud is
part of earnings manipulation done outside the law and standards. Whereas, the activities covered by
the terms earnings management (such as income smoothing and big bath) and creative accounting
(or window dressing) normally remain within the regulations. In this regard, corporate governance
mechanism, particularly effective boards, ... Show more content on Helpwriting.net ...
For instance, Enron that recorded as the seventh largest corporation by its market capitalization in
US, averaging $90 per share and worth US$70 billion in 2000, was suddenly collapsed in late 2001.
Morrison (2004) asserts that the cause of the collapse is the largest corporate fraud and audit failure.
Then, it can be understood that the massive corporate fraud caused by fraudulent financial reporting
have contributed to a very sharp decline in the US stock market.
Many of these corporate scandals include such as action of account manipulation, earnings
management, restatement and other failing to report the significant events to investing public. Then,
what corporate fraud does really mean? One of the answers, corporate fraud is defined as an
intentional or reckless conduct, whether by act or omission, that results in materially misleading
financial statements (National Comission on Fraudulent Financial Reporting of the United States,
1987). Many prior studies (Persons, 2006; Bédard, Chtourou & Courteau 2004; Uzun,
Szewczyk & Varma, 2004; Abbott, Parker & Peters, 2000; Beasley, 1996) have found that
corporate fraud generally involves the accounting irregularities notion, such as:
* Manipulation, falsification or alteration of accounting records or supporting documents from
which financial statements are

Case Study Of Parmalat Scandal
Corporate accounting fraud is the major factor that has led to the collapse of many companies, one
of which is Parmalat company scandal. The Parmalat group, a world leader in the dairy food
business, collapsed and entered bankruptcy protection in December 2003 after acknowledging that
billions of euros were missing from its accounts. Its collapse had been labeled as "European Enron"
and has led to a deep questioning of the reliability of accounting and financial reporting standards as
well as that of the Italian corporate governance system. Therefore, this paper has discussed, firstly,
what factors have allowed fraud to occur in Parmalat. Secondly, how the fraud could have been
avoided from happening in this company. Thirdly, has discussed some red flags that indicate fraud
was occurring in the company. Lastly, the paper has discussed some of the lessons that can be learnt
from the Parmalat company scandal.
Keywords: Parmalat, Fraud, Bonds, Banks, Missing funds, collapsed. ... Show more content on
Helpwriting.net ...
Without understanding the company financial condition he acquired many companies in the food
industry which resulted in financial losses. Also he manipulated financial reports in order to hide
losses. Tanzi further, diverted 500 million euros from company reserve to Parmatour (which
belonged to his daughter) without taking approval from shareholders and stakeholders.
Second person involved in the scandal was the CFO of the company– Fausto Tonna; he was
completely dependent on the internal auditor, without even checking the company books that were
handled by the auditor. He also announced a bond issue of 500 million euros, without informing the
shareholders, stakeholders and other

Satyam Case
CASE STUDY: MARCH 2012 SEMESTER I. Analyze the case and respond to the following
questions: a) Discuss the earnings management techniques employed by the management of Satyam.
Earning management or creative accounting is referred to the manipulation or misrepresentation of
the company's financial earnings in order to achieve stable and positive financial position. This was
achieve through directly or indirectly use of the accounting methods. Even though the manipulation
may follow all the accounting standards and laws, they may go opposite of what the standards and
laws were originally trying to establish. Therefore, earning management is often considered
materially misleading and referred to a fraudulent activity.
Satyam ... Show more content on Helpwriting.net ...
Because of the pressure situation, he finally decided to come into decision to manipulate the
company's earnings and engaged in fraudulent activities.
The other factor that motivated Satyam to manage their earnings is due to the need to maintain a
competitive position within the financial market. Satyam Computer Services is among of the top
leading company in Indian IT industry. If Satyam fails to shows that company is operating in
profitable manner and he discloses the real loss of the company it will cause the investors and public
loss confidence in them. Therefore, they will not be able to place the company's name as the leading
company of IT services and unable to compete with the other top leading IT companies. Because of
this reason, Ramalingam Raju had engaged in fraudulent activities.
In addition, factors that may motivate managers of Satyam want to manage their earnings is because
of their personal gains such as bonus and they might be belief that the laws and regulations can be
easily be bypassed. The managers will be rewarded with bonus if the company shows a high profit.
So in order to get the bonus Satyam was motivated to commit fraud. Since earning management was
a complex techniques that are not easily to trace, this make Satyam feel confident that involving in
earning management will not be caught. But as the consequences, due to too much gap between the
real earnings figures with the reported earnings figures, Satyam was not be able to hide the

Why The Creative Accounting Is Important Factors Essay
Financial reports are one of the most important factors on evaluating whether an organisation has
met its objectives and goals, and also has satisfied its directors, lenders, and other stakeholders.
Although the relevant accounting and financial standards, regulations, and frameworks are
established for the fair and reliable presentation of financial reports, there are still fraud issues from
manipulating financial information. Due to the recent global economic crisis, corporates tend to use
creative accounting to maximise their profit and financial performance, and it seems to result in
some serious financial frauds. A lot of questions come up with this creative accounting technique as
well as the relation to corporate governance and frauds. It obviously has some negative results from
inappropriate use of creative accounting but, on the other hand, it could be useful to present a
company's interests better within laws and regulations. This essay will elaborate what the creative
accounting is, why companies use this accounting method, both positive and negative views of using
creative accounting with appropriate examples and cases, and possible recommendations to improve
the accounting standards and systems. Firstly the definition of creative accounting and how
corporate governance and fraud are connected to creative accounting should be discussed. Creative
accounting defines that a company uses the accounting knowledge to distort the financial figures but
by following

Standard Issues: Aicpa
Standard Issues: AICPA
The American Institute of Certified Public Accountants has created a code of professional conduct
that all certified public accountants must follow. This code of conduct lists the responsibilities CPAs
have when working with a company 's financial information. The AICPA also includes information
regarding the integrity, objectivity, independence and due care that CPAs must use when working in
the accounting industry. The AICPA offers an ethics course for accountants to refresh their
understanding of accounting ethics.
The AICPA professional code of conduct is designed to protect the individual and users of the
company's financial information. The accounting scandals of Enron, WorldCom and Sunbeam
during the ... Show more content on Helpwriting.net ...
The Code of Professional Conduct could not possibly proscribe every action that is to be avoided.
In light of the strict principles and rules of the AICPA, accounting ethics has been deemed difficult
to control as accountants and auditors must consider the interest of the public which relies on the
information gathered in audits while ensuring that they remained employed by the company they are
auditing. They must consider how to best apply accounting standards even when faced with issues
that could cause a company to face a significant loss or even be discontinued. Due to several
accounting scandals within the profession, critics of accountants have stated that when asked by a
client "what does two plus two equal?" the accountant would be likely to respond "what would you
like it to be?". This thought process along with other criticisms of the profession 's issues with
conflict of interest, have led to various increased standards of professionalism while stressing ethics
in the work environment.
From the 1980s to the present there have been multiple accounting scandals that were widely
reported on by the media and resulted in fraud charges, bankruptcy protection requests, and the
closure of companies and accounting firms. The scandals were the result of creative accounting,
misleading financial analysis, as well as bribery. For example, various companies had issues with
fraudulent accounting practices, including Enron, WorldCom and AIG. One

The Complexity Of Revenue Recognition
similar opinion of the complexity of revenue recognition to come up with its hypothesis, such as,
First, "when revenue recognition is complex, managers are more likely to err when applying
standards to transactions, increasing the likelihood of unintentional misreporting due to mistakes"
and second, "complex accounting may allow managers to manipulate financial statements" evident
of (p.73) Sherman, Loseman and Cardell (2015) believed that revenue recognition is the focus of
SEC enforcement, as well as subject to a high level of risk of fraud and an area which proven for
financial reporting misstatements (p.19)
Whitehouse (2014b) identified companies that will see big changes are the high–tech sectors,
companies selling a product with services attached, companies that generate revenue under licensing
agreements (p.57). Whitehouse identified companies that will go through large changes , such as,
software package with technical support and upgrades included, cell phone with service and data
plans, equipment purchase that includes delivery and installation, new car comes with free
maintenance and warranties for specified timeframe (p.57). Yeaton (2015) determined areas where
companies would have to make necessary estimates and judgement to comply with the new
requirements on realizing or recognizing revenue from contracts with customers (p.52).
Stallworth and Degregorio (2004) indicated the role of internal auditors to fully understand the
revenue management practice to

Difference Between Management Accounting And Financial...
Task 1 P1) Management Accounting is a branch of accounting which refers to accounting
information useful for management and acts as a decision–making support system. Its functions
include planning, controlling, and decision–making in an efficient and effective manner.
(Bhattacharyya, 2011) Management Accounting vs. Financial Accounting Management accounting
and financial accounting are different in many ways. To begin with, the oldest difference between
these two is that Management accounting provides information to internal users which include
managers and employees. Whereas, financial accounting provides information to external users such
as shareholders, government, bank and so on. (ACCA, 2016) Financial accounting records past or
historical ... Show more content on Helpwriting.net ...
To begin with, the company must have excellent dealings with the suppliers. The staffs have to be
multi–skilled and flexible to changes. The equipment must be versatile. JIT can become more
successful if correct forecast are created and latest IT equipment be utilized. Excellent company and
employee relationships are also important. Finally, quality ought to be the top most main concern.
Through the use of just–in–time systems, there's a greatly reduced dependence on recyclables and
work–in–process, while done goods inventories should be near non–existent. The usage of just–in–
time inventory gets the following advantages. There is a nominal amount of inventory which is
outdated, because the higher rate of inventory turnover maintains any items from staying in stock
and becoming outdated. Since production works are extremely brief, it is much easier to halt
production of 1 product type and turn to another product to meet changes in customer demand. Also
the low inventory levels imply that inventory positioning costs, such as warehouse space, are
reduced. The business is investing much less profit its inventory, since fewer inventories is

Case Study On Auditing Scandal
Auditing scandal
Dr. Rihab Khalifa
Table of Content
Section 1: introduction to the case and background
Section 2: timeline sheet of major events
Section 3: auditing and accounting issues within the case
Section 4: any potential outcome to the case
Section 5: suggestions for future improvement to prevent such case
Section 6: references
Section 7: appendices
Introduction and Background
Xerox background :
Xerox Corporation is an American multinational archive administration company. It delivers and
offers a scope of shading and highly contrasting printers, multifunction frameworks, scanners,
advanced generation printing presses, and related counseling administrations and supplies. ... Show
more content on Helpwriting.net ...
In spite of dangers from Mr. Allaire that could immediate liquidation, in 2002 the SEC recorded suit
against Xerox blaming administration for hustle and forced a 10 million fine. Xerox settled the case
without taking any wrong action restated 1997–2000 budget results and paid the 10 million
penalties.
Section 5: Suggestions for Future Improvement to Prevent Such Case:
Lots of companies can prevent frauds from happening; unfortunately some companies do not know
when to detect frauds. By maintaining some approaches we can reach our goal of being fraud free.
The first approach, is by finding the fraud before claims are paid, that happened by combining
business rules, predictive analytics and social network analysis to uncover hidden relationships. We
can also detect frauds by reducing false positives, with an advanced scoring engine that uses

independent and combined scores including scoring of associated networks. We also have a quickly
uncovering organized fraud rings, using link analysis and visualization technique to expose hidden
relationships among entities.

Case Study Of Fredy Mac
Freddie Mac Scandal
About the Company
Federal Home Loan Mortgage Corporation (Freddie Mac) a Government–Sponsored Enterprise
(GSE) was chartered by Congress in 1970 with a public mission to stabilize the nation's residential
mortgage markets and expand opportunities for homeownership and affordable rental housing.
Freddie Mac (and its sister institution Federal National Mortgage Association –Fannie Mae) was set
up based on the idea that neither government nor private banking interests could address the nation's
housing finance needs. The company's charter established a board comprising 18 members – thirteen
elected by shareholders and five appointed by the President of the United States. Their main mission
was to provide liquidity, stability and affordability to the U.S. housing market.
The company buys mortgages from mortgage lenders, such as commercial banks and other financial
... Show more content on Helpwriting.net ...
Also senior management and the board failed to establish and maintain adequate internal control
systems.
The Securities and Exchange Commission charged the company with securities fraud for which the
company had to pay $50 million penalty which was expected to be distributed to the investors
through a Fair Fund. The four former executives who were charged with negligent conduct agreed to
settle the case without admitting or denying the allegations:
David W.Glenn( president, Chief operating officer and vice chairman of the board)– agreed to pay
$250,000 civil penalty and $150,000 in disgorgement
Vaughn A. Clarke(chief financial officer)– agreed to pay $125,000 civil penalty and $29,227 in
disgorgement
Robert C. Dean( former senior vice president)– agreed to pay $65,000 civil penalty and $34,658 in
disgorgement
Nazir G. Dossani (former senior vice president) – agreed to pay $75,000 civil penalty and $61,663
in

Comparison Between Enron And Arthur Anderson
Enron and Arthur Anderson were both giants in their own industry. Enron, a Texas based company
in the energy trading business, was expanding rapidly in both domestic and global markets. Arthur
Anderson, LLC. (Anderson), based out of Chicago, was well established as one of the big five
accounting firms. But the means by which they achieved this status became questionable and
eventually contributed to their demise. Enron used what if often referred to as "creative" accounting
methods, this resulted in them posting record breaking earnings. Anderson, who earned substantial
audit and consultation fees from Enron, failed to comply with the auditing standards required in
their line of work. Investigations and reports have resulted in finger ... Show more content on
Helpwriting.net ...
As competition increased and the economy started to plunge in the early 2000s, Enron struggled to
maintain their profit margins. Executives determined that in order to keep their debt ratio low, they
would need to transfer debt from their balance sheet. "Reducing hard assets while earning increasing
paper profits served to increase Enron's return on assets (ROA) and reduce its debt–to–total–assets
ratio, making the company more attractive to credit rating agencies and investors" (Thomas, 2002).
Executives developed Structured Financing and Special Purpose Entities (SPE), which they used to
transfer the majority of Enron's debt to the SPEs. Enron also failed to appropriately disclose
information regarding the related party transactions in the notes to the financial statements.Andersen
performed audit work for Enron and rendered an unqualified opinion of their financial statements
while this activity occurred. The seriousness and amount of misstatement has led some to believe
that Andersen must have known what was going on inside Enron, but decided to overlook it. Assets
and equities were overstated by over $1.2 billion, which can clearly be considered a material amount
(Cunningham & Harris, 2006). These are a few of several practices that spiraled out of control in an
effort to meet forecasted quarterly earnings. As competition grew against the energy giant and their

Causal Effect of Creative Accounting on Financial...
CAUSAL EFFECT OF CREATIVE ACCOUNTING ON FINANCIAL REPORTING AND
DECISION MAKING.
(A Survey of Selected Financial Institutions in Nigeria)–jetibensi@yahoo.com By: Jackson Etibensi
A Concept Note Submitted to the University of Calabar, Graduate School as Prerequisite for
Admission into MSc. Accounting, Faculty of Management Sciences.
INTRODUCTION:
Financial Statements provides information that is used by interested parties (users) to assess and
appraise the performance and financial Status of managers and the institutions respectively and also
to make economic decisions. External auditors are engaged to ensure the reliability and
trustworthiness of such Financial Statement so presented. STATEMENT OF PROBLEM:
Managers may wish to use ... Show more content on Helpwriting.net ...
OBJECTIVES OF STUDY:
The Broad objective of this Study would be to determine the impact of Creative Financial Reports
and Decision making.
The main aims of the study would be as follows. 1) To examine the extent to which manipulation of
Financial Statements affects Financial Reports. 2) To determine the effect of Fraudulent Financial
Report/ Statements on Internal Decision Making. 3) To evaluate the impact of Earnings
Management on the decision making of external users of Financial Statement. 4) To determine the
effect of Creative Accounting on External Auditors decisions as to the forming of an opinion on the
Financial Statement 5) To ascertain whether well designed Framework of Accounting regulations
will curb Creative Accounting practice in Corporate Financial Reporting. (CFR). 6) To examine the
influence of Creative accounting on Audit Failures of Nigerian Financial institutions.
JUSTIFICATION:
This research work is relevant since it gives a positive outlook on the area of accounting that needs
due attention and consideration, as the concept of Creative Accounting has created doubt on the

Week 1 Acc556
ACC 556
This report will present the necessary information needed to understand and decide whether to
perform a full financial status review before proceeding with the bid. The information covered will
include: * The effect of occupational fraud and abuse on the company * U.S. governmental
oversight of accounting fraud and abuse and its effect on the company Potential corruption schemes
to be aware of in the company
Recommendation of types of accounting evidence and methods of gathering such evidence to
support the financial status review.
Fraud deterrence occurs in several stages, and the key is to know that prevention is not to same as
deterrence. First is the impact of controls ... Show more content on Helpwriting.net ...
Violations recognized in an organization are required to begin administrative or judicial proceeding.
The outcomes of these proceedings typically offer a settlement or a hearing. Moreover, cases are
reported to the SEC in official documents known as litigation releases or administrative
proceedings. When the documents are reported as violations of the Securities Acts, they are labeled
as Accounting and Auditing Enforcement Releases.
Corruption schemes have differences as well as similarities. Bribery is a scheme that impacts a legal
deed by proposing, providing, obtaining, or lobbying something of value to change the outcome in a
favorable fashion. On the other hand commercial is similar in that something of value is offered in
exchange for a certain business decision. Illegal gratuities are perks given as a reward to an
employee in exchange for a decision. Most of the time illegal gratuities influence employees to
make decisions not in the best interest of the organization. Economic extortion has to do with an
organization or individual making a payment that will bring unwanted attention or impairment to the
organization. These types of corruption schemes are very similar; however the differences exist in
the conflicts of interest. Conflicts of interest occur

Essay about Fannie Mae Case
Fannie Mae case.
Federal regulators noted a growing string of high profile scandals at major U.S. corporations in
recent years. The number of fraud cases investigated by the Securities and Exchange Commission
jumped 41 percent in the last three years (112 cases in 2001 compare to 79 cases investigated in
1998), resulting in tens of millions of dollars in fines to settle the charges.
I have decided to take a closer look at Fannie May. This company operates in the residential
mortgage finance industry. It facilitates the flow of mortgage capital to increase the availability of
homeownership for low, moderate, and middle–income Americans. Its lender customers are part of
the primary mortgage market, where mortgages are originated and ... Show more content on
Helpwriting.net ...
The effects on Fannie Mae, a highly politically connected company, could be enormous. The
company holds over $1 trillion in assets, and purchases more mortgage loans than any other lender
in the U.S.
When the accounting errors first emerged Fannie Mae estimated that there would be an adjustment
of about $9 billion in its reported earnings over the contested period. That number has since
increased to over $11 billion but may increase again as further irregularities discovered with
insurance related issues. No estimate of these additional potential revisions is currently available.
On December 21, 2004, Franklin D. Raines stepped down as Chairman and Chief Executive Officer
and J. Timothy Howard resigned as Chief Financial Officer. Raines' departure, at age 55, was
structured as an early retirement. Under his employment agreement and the terms of the Executive
Pension Plan, Raines is entitled to receive 60 percent of his "High–Three Total Compensation",
which is his highest total compensation for three consecutive years during the last 10 years. Upon
early retirement, this number is slightly reduced leaving him with estimated annual benefits of
$1,085,462. Furthermore, the company's Stock Compensation Plan of 1993 allows all options to
become immediately exercisable and fully vested upon early retirement. The 2003

Advantages And Disadvantages Of Creative Accounting
Basically, creative accounting does involve some manipulation in financial statements, especially in
the balance sheet. It can be simply means income or earns something. Creative accounting will
always be reflected in financial indicators and fundamentally the factor of company solvency,
doesn't matter what is the reason of it. This is because not everything that looks like profit is really a
profit. The benefits and drawbacks of creative accounting are vary with different scenarios.
Although most of the times creative accounting are tend to bring disadvantages to the organization
and identifies with not to use it but there are not always so catastrophic scenarios. If creative
accounting cohered with an ethical and legal standards as well as the GAAP, they can absolutely
yield immense interest to the company as ... Show more content on Helpwriting.net ...
That is why creative accountants undertake this phenomenon in good intentions in order to promote
their companies. This is where we call it as money–spinning attractions. Companies also want to
show a steady income stream to impress the investors and to keep the shares prices stable. Creative
accounting also may help to maintain or increase the share price by minimizing debt level to the
lower risk and by showing improved profits. This can help the company in raising new capital and
in takeover attempt. On the other hand, the unreasonable and dishonestly excessive use of creative
accounting will led to the downfall of numerous high–profile companies. This gave rise to the need
for developing the GAAP. As for instance, recently the Great Giant like Enron failed as a result of
cooking the books to hide the economic actuality. One of the example in the case of US film
industry in which they claim huge expenses against successful movies to lower the remuneration of
writers, producers as well as actors (Grover 199

Case: Lipschultz, Levin & Gray
Case: Lipschultz, Levin & Gray
Course Title: Management and Organization
Course Code: EMBA 503
Contents:
Section 1: Page
o Lipschultz, Levin & Gray –The People's Company 3
❖ The Focus on people 3
❖ Goal 3
❖ Client Services 4
❖ Some significant changes at the company 6
❖ The Different look ... Show more content on Helpwriting.net ...
Reviews & Compilations It provides financial reporting on two levels of assurance: * Review –
some analytical procedures conducted with limited assurance * Compilation – based upon client
information provided and used primarily for internal use. Financial Forecasts & Projections
Forecasting is a necessity when trying to effectively manage and lead a business to profitability.
From simple projections to complex financial modeling, our experienced staff can assist you in
achieving your company 's financial goals. Cash Flow & Budgeting Analysis A business can be
profitable and still run into trouble due to cash flow issues. It can forecast and evaluate your
company 's financial condition, estimate financing requirements, and track cash–flow sources and
uses. Tax Services LLG prefer to take a proactive vs. reactive approach to tax services. By keeping
current on new tax laws and legislation, identify key tax planning opportunities that minimize both
client current and future tax liabilities. Accounting Software Selection & Implementation With the
number of computerized accounting software packages available for small businesses and

Warner Brothers Fraud
What I found most interesting about this article were the examples that highlighted the corruption
that some of our countries most elite production companies are guilty of. This article proves that
some people will walk over others by lying and stealing all for the chance to increase their
individual profits. It's no wonder independent films are emerging alongside It is surprising to me
that J.K. Rowling with all of her success has not contested the financial statements that Warner
Brothers has offered to the public. If the article is true then she has entitled too much more money.
With a large financial estate like hers, I wonder why her accountants haven't notified her of this
potential for lack of a better word, theft. The aforesaid considered I am wondering if perhaps her
accountants have been monetarily persuaded to overlook these details or perhaps there is a
possibility that Ms. Rowling has been secretly compensated which would explain her silence. I
guess my real question is how far are they willing to go? Fraud could lead to bribery. Bribery could
lead to blackmail and blackmail could lead to murder. Ethically, it never makes sense to
misrepresent financial data. As we learned in from the Dutch, mutual trust and respect can cause an
Stallone's lawsuit accuses Warner Brother's of creative accounting and alleges that they reported
profit loss as opposed to gain allowing them to avoid paying him and another production company
the extra money they were entitled to as contracts stipulated upon the movies rising success.
Stallone is pursuing the lawsuit mainly as a gesture to speak out and stand against large Hollywood
companies that continue to use this practice to shortchange littler production companies and

Advantages Of Creative Accounting
Amat, Blake & Dowds (1999) perceived the various methods of creative accounting can be
considered to fall in four categories:
I There are different options to choose accounting methods sometimes like in many countries for
example; a company is allowed to choose between a policy of writing off Research and
Development expenditure as it occurs and amortizing it over the life of the related project. A
company can therefore choose that accounting will give them preferred image.
II. Some entries in accounting involve an unavoidable degree of estimation, judgment and
prediction. In some cases for example, in estimating life of an asset for calculating depreciation,
these estimates are normally made inside the business and the creative accountant ... Show more
content on Helpwriting.net ...
In order to have a high EPS, managers should either increase the earnings or decrease the number of
shares. Decreasing the number of shares is hard task as usually when a firm needs extra investment,
it will deliver new shares for the new creditors. Thus the easiest way to increase the EPS, is to
increase the earnings. EPS can be modified in two ways: first, by adding or removing certain
revenues or expenses, and second by presenting an item before or after the profits used to calculate

The Benefits Of Allyson Loomis
The blinking continues, taunting you as you stare at the blank screen searching for the perfect
opening to your paper. You might have written a few words only to erase them, feel like the clock is
moving twice as fast or maybe you decided to try again later. The hardest part of writing a paper is
starting it. However, the solution your imaginative block could be found in taking a creative writing
course at the University of Wisconsin–Eau Claire.
UW–Eau Claire's creative writing program is a hidden gem that provides incredible benefits to all
majors. Allyson Loomis is just one of the many talented creative writing professors at UW–Eau
Claire. Loomis has been teaching at UW–Eau Claire for 15 years, but it was her first creative
writing class, ... Show more content on Helpwriting.net ...
"The little kid in me always wanted to be a writer, and I wanted to make sure that I didn't let that
dream die just because I fell in love in accounting also," Hegna says.
Allyson Loomis has the unique opportunity of teaching many courses at UW–Eau Claire, many of
which include very few English majors. Loomis sees a lot of benefits that can be provided from
creative writing courses, breaking it down as follows:
Writing Skills: This may seem obvious, but creative writing graduate with excellent writing skills
that will serve them along a huge array of career paths.
Imaginative Thinking & Problem Solving: Creative writing students must practice making
something out of nothing. Not only do they practice coming up with good ideas for stories/poems,
but also they must think up good ways to tell their stories/poems. They must invent the structure of
the story. They must find the best way to tell it clearly, efficiently and engagingly. This is "problem
solving" of the first order.
Interpersonal Communication: Creative writing students must evaluate each other's writing and
learn to communicate that evaluation kindly and

Accounting Scandal of Worldcom
MANAGERIAL ACCOUNTING
WORLDCOM
How did it cook the books?
Nguyen Bao Khanh
Student ID: FB60162 Class: FB0662
May 19th, 2012
APENDIX
1. WorldCom's accounting scandal 2. How did WORLDCOM cook its books? 3. Conclusion
WORLDCOM headquarter in Virginia, USA.
WORLDCOM'S ACCOUNTING SCANDAL
WorldCom, established in 1983, whose CEO was Bernard Ebbers, was the second largest long
distance phone company in the US after AT&T. It could be seen as a pride of America until it got
into one of the biggest accounting scandals in the American history which finally led to its
bankruptcy in 2002. On July 21st, 2012, WorldCom filed for bankruptcy, which was worth 103.9
billion USD and became the largest filing at its time. Its CEO, Bernard ... Show more content on
Helpwriting.net ...
There would be no effect on current net income as increasing in Equipment means increasing in
depreciation expense. Instead of being spent in the current year only, the cost is spread over many
years. At the moment, you may have the general image of the tactics that WorldCom used to cook
their books.
WorldCom announced $3.8 billion in improperly booked expenses for 2001 and 2002, and an
additional $3.3 billion in accounting errors. Moreover, WorldCom officially filed for bankruptcy
when found an accounting fraud with the amount up to $11 billion. So how did it happen? As having
mentioned, WorldCom's CEO Bernard Ebbers was convicted of being guilty for the stock and
accounting fraud, so it was obvious that the fraud occur from the management level of the company.
WorldCom's major operating expense was called line costs, which means cost paid to lease other
telephone operators' network, phone lines and so on. In short, just remember that line costs are its
main operational expense. In 2000, WorldCom was actually not doing a good business, and they
somehow tried to cover the current reality by performing some 'magic' with their accounting stuff,

and here is the thing: WorldCom was managing to cover the truth behind its business, so according
to his indictment, Mr. Scott Sullivan – former CFO – tried to move around the reserves for

Proj410 Case Study 2 Essay
Executive Summary
Student Name
August 14, 2010
PURPOSE/OBJECTIVE: The purpose of this executive summary is to outline the outsourcing /
contracting process for Travel Magazine. This process will ultimately be used to determine which
business processes at Travel Magazine will be outsourced and which will remain in–house. In
addition, this summary will include various vendor selection considerations, such as evaluation
criteria and performance measurements, for those processes that will be outsourced.
GENERAL OUTSOURCING INFORMATION: The following is some general information
regarding the outsourcing of business processes: * Outsourcing promises valuable opportunities, but
may also pose substantial challenges and risks * One ... Show more content on Helpwriting.net ...
In addition, we believe that it would be to our competitive advantage to continue with our strategic
marketing and advertising plan as opposed to outsourcing this process.
RELEVANT FACT #2: The remaining seven business processes are candidates for outsourcing
based on the above strategic deductive reasoning technique. Based on this information, please see
the table below for further analysis of these processes and the feasibility of each regarding
outsourcing.
BUSINESS PROCESS | OUTSOURCING PROS | OUTSOURCING CONS | Accounting (accounts
payable, accounts receivable, payroll, general accounting, etc) | 1) Reduced personnel costs2)
Access to better and more specialized talent3) Allows for better growth potential, particularly
concerning shared services | 1) Takes away some level of control of accounting and bookkeeping
processes2) Allows vendor access to potentially sensitive financial information | Photography | 1)
Eliminates the need for internal photography staffing.2) Access to more expert photographers3)
Reduces the costs associated with photography equipment | 1) Takes away some of the internal
photographic creativity2) Prevents our staff from having as much of a choice with regards to photos
(must rely more on photos from others) | Publishing | 1) Reduced overall costs associated with
publishing2) Allows staff to concentrate more on creative writing and editorials | 1) As a magazine
company,

Waste Management
Waste Management is a publically traded Houston, Texas based waste and environmental services
company. Founded in 1894, Waste Management is the largest disposal company in
North America, handling over half of the garbage pickup in the United States. In 1998, Waste
Management was involved in the largest accounting scandal involving an American company to
date. Under the company's founder and chairman Dean Buntrock, Waste Management implemented
unsavory accounting practices which directly inflated the company's net income by $1.7 billion in
1998. Though the accounting fraud was multifaceted, the firm's method of depreciating property,
plant, and equipment was perhaps the most deceptive. The company used the straight line method of
Additionally, Waste Management failed to record a variety of other expense; most notably, the
company did not record depletion expense on their landfills as they were filled. Again by not
recording this Depletion Expense, Waste Management understated its expense and overstated its net
revenue.
As a result of these questionable accounting practices, Waste Management's stock price dropped
significantly in November 1998. Soon after, the company faced a shareholder class– action lawsuit
which they settled for $457 million. The Securities and Exchange Commission began an
investigation which resulted in a lawsuit against six of Waste Management's most senior executives
including Dean Buntrock in U.S. District Court in Chicago. Burtrock and other senior leaders were
found guilty of intentionally and knowingly using fraudulent accounting practices to mislead
investors. Buntrock and the other executives cumulatively agreed to pay $17.1 million for
misleading investors. The SEC also fined Waste Management's doomed 'independent" auditor
Arthur Anderson $7 million. Following the lawsuits and investigations, Waste Management
restructured its company and hired all new leadership and a new auditor. Today, this accounting
scandal is largely a forgotten memory and Waste
Management continues to be one of the most important and largest environmental services
companies in the world.
The Waste Management accounting scandal is a

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