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 organizations 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.
Heres 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.
Highlights of the Biggest Accounting Scandals Ever