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Accounting scandals are those accounting irregularities proven in court to have been implemented deliberately in order to mislead the investing public, the employees, the regulatory bodies, and various financial institutions.
Most of the high-profiled corporate scandals that happened in the history of America led to stock market crashes, bankruptcies and job loss. Fraud perpetrators misled the public by presenting financial statements that made their companies appear seemingly successful at generating considerable amounts of profits.
At the helm of these accounting scandals were the Chief Executive Officers and the senior executives of the organization’s top management. As senior executives, they were the first to benefit from false reports of high income since a part of their compensation packages were the profit shares they collected. Actually, their profit shares were being paid-out from funds derived from their investors’ money, because in truth, no actual cash increments had been gained from business operations.
Other sources of money were the substantial loans extended by banks that were also misled into believing that the organization was earning profitably.
Here’s your chance to discover if you can recognize these types of unscrupulous deals by testing your knowledge of how these accounting scandals were perpetuated and subsequently discovered.
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Highlights of the Biggest Accounting Scandals Ever
- Final Rule: Retention of Records Relevant to Audits and Reviews http://www.sec.gov/rules/final/33-8180.htm
- Image: Cost Chicanery: A bag of money, US dollars, spinning in a vortex of color, representing chicanery or misrepresentation of cost or economic information or data, but could represent outright financial fraud by Barbara Lock at Wikimedia under public domain.
- By Salinger, Lawrence M.-- Encyclopedia of White-Collar & Corporate Crime,
Volume 1-- http://books.google.com/books/about/Encyclopedia_of_White_Collar_Corporate_C.html?id=0f7yTNb_V3QC