Fraudstorytelling | Weekly filmtips | June 02, 2022
Title: Waste Management $1.8 Billion Fraud Story
Tagging: #Accountingfraud, #Bribery, #Businessethics, #Financialfraud, #Integrity
Detecting and investigating fraud is an important responsibility of the accountant. However, fraud was still committed in some cases. Corporate fraud has a significant social impact. They can lead to severe consequences for investors and negatively impact trust in the financial system. Today, we’d like to share one of history’s biggest accounting frauds. This video by deepEND will show us about Larry Beck’s waste management company, which he founded in the 1960s. The waste management company was, as the name implies, a company that handled trash in the United States. Larry Beck became successful and began purchasing many of the smaller garbage collection services throughout the country. In 1972, the company had made 133 acquisitions and was generating about $82 million in revenue after going public. It also employed over 12,000 people and owned over 5,000 vehicles. However, Waste Management was involved in a number of fraudulent crimes. The Waste Management Inc. 1998 scandal occurred in terms of meeting predetermined earnings targets by increasing profits and decreasing or eliminating expenses. Revenues were not increasing as quickly as they should have. The chief officers realized this and began to engage in the mentioned fraudulent acts in order for their financial accounts to appear what they wanted. Waste Management was obligated to audit its accounting records because it was a publicly traded corporation. For this job, they hired Arthur Andersen. Arthur Andersen revealed errors in Waste Management’s accounting books and suggested adjustments and methods for correcting them. Waste Management’s officers declined to make the suggested adjustments. The stakeholders bribed Arthur Andersen by assuring them that they would get additional payments outside the initial agreement in order for them to hide their traces. deepEND will go further into this story.
Would you like to become a member of our community?
Sign up via the link: https://lnkd.in/gYSgcue