More and more corporate scandals are happening in America. Why have these scandals just shown up in recent years? What causes these corporations to lie and be deceitful towards investors? Though once seen as legitimate, fair, honest, and respectable, corporations have arrived at a stage of greed and deception. This can be explained by a number of factors such as how the stock market works, the stock market boom, changing company practices, CEO benefits, and specific company examples.
Public companies are any company that has stock available to the public to buy. A company that wishes to set up a new business or expand its existing business can raise the capital it requires either by borrowing money or by issuing shares to investors. The investors become shareholders in the company, meaning they are part owners of the company and share in its profits and growth. These stocks represent how well the company is doing. When the accounting books are tampered with to show the company is thriving when debt is actually accumulating is when investors lose all their shares because they fall all of a sudden and lose all worth; without any warning. Companies wishing to have their shares traded must first be listed. To become listed, a company must be large enough for there to be a market in its shares and it must agree to abide by the listing rules which, with other things, require it to keep the market informed of its activities and to regularly report profits and other financial information (Flint). Auditing firms have been overlooking figures and hiding debt from the public for their high paying companies. This is where our corporations have gone astray and started to cheat their investors by deception because of conflicts of interest of...
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On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did. Many kept on buying the stock, the corporate mantra and the dream. In the meantime, the company made many high-risk deals, some of which were outside the company’s typical asset risk control process. Many went sour in the early months of 2001 as Enron’s stock price and debt rating imploded because of loss of investor and creditor trust. Methods the company used to disclose its complicated financial dealings were all wrong and downright deceptive. The company’s lack of accuracy in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its downfall. The whole affair happened under the watchful eye of Arthur Andersen LLP, which kept a whole floor of auditors assigned at Enron year-round.
In Park Avenue: Money, Power and the American Dream is a documentary by Alex Gibney whom shows how wealthiest Americans whom live Manhattan 740 Park Avenue are able to control most population’s wealth. As well, the psychology effect wealth has on people.
...FO at the Houston airport. While Mr. Fastow's parents were undergoing a random search, he stopped to chat with Mr. Schwieger. "I never got an opportunity to explain the partnerships to you," he said, according to Mr. Schwieger. Mr. Schwieger replied, "With everything that has come to light, I probably wouldn't like the answer I would have gotten."
In Bernard Malamud’s, The Natural, the American Dream traps many people in a never ending cycle of failure. This is seen when Roy is shot by Harriet in a hotel room after he tells her he will be the best in the game despite that she points a gun at his head. Secondly, when Roy and Gus are making bets, Roy keeps betting despite losing every time, showing his false sense of hope that traps in a cycle of failure. Finally, Roy’s desire to be with Memo finally corrupts him thus causing him to ruin his dreams to be the best in baseball and when he regains hope that he can win the game, it does not happen. The American Dream causes insatiable hunger and results in a never ending cycle of failure because Roy has a false sense of hope causing him to make the same mistakes multiple times.
Enron deliberately created artificial shortages in California for electricity, two days in a row, causing the price to skyrocket. Enron is a natural gas and electricity plant/business that buys and sells energy. The most influential historical event that has happened during the 21ST century is The Enron Scandal because the loss sustained by investors exceeded $70 billion and only a small amount of the lost money was returned.
Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
As individuals, we have our own ideas of what the American Dream consists of. To some it may be the realm of possibilities, while to others it may be fame and fortune. America is the only country in which the idea of a national dream has been continually upheld, and we have been a model for other nations to follow. Foreigners have come here to live the dream, and all the while Americans are still struggling to find it. As we continue to search high and low for how to find or how we can buy the dream and make it a reality, Americans have promiscuously thrown their money around in hopes of obtaining the dream and consequently are broke and more miserable than ever. Does the American Dream actually exist, and if so, is there really a way to achieve or acquire it after all these years of unrelenting pursuit?
From families looking to flee harsh living conditions in their native country to American citizens wishing to escape impoverished conditions through hard work and determination, the “American Dream” is a concept that people throughout the world have aspired to achieve for hundreds of years. Regardless of birthplace or socioeconomic status, the “American Dream” promises success, prosperity and upward mobility to any citizen with ambition and work ethic. Hundreds of millions of American citizens as well as immigrants have flourished in the United States throughout the course of history in a society with a thriving middle-class. However, in recent years, this dream has become increasingly difficult to achieve for those who are not already wealthy.
People will journey far and wide, traverse the entire continent, suffer all manner of pain and suffering, if they believe that, in the end, they will be rewarded. That is why it comes as no surprise when people from other countries struggle to get to America, believing the ancient tale of "the American Dream", convinced that they will finally make it big in this land of riches. But they find out it is not like that.
"This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.
The American Dream is referred to by many people as the reason to come to America. It is, or so they say, the pursuit of life, liberty, and happiness. Unfortunately they are incorrect, there truly is no American Dream, it is all an illusion given to us by our founding fathers as a reason for the inequality in which people are treated. I have lived in this country for 16 years now and have all the patriotic bullshit about how we give everyone equal opportunity and how everyone is equal in the eyes of the law. I just laugh when I read this. Throughout our country’s 300-year history, it is all about raising one person over the other. It started with the movement of the Native Americans. They were here before anyone else, and they were moved because they did not live with all the violence our ancestors did. The founding fathers continued to push them further and further away because it was beneficial to them at the time. They said if you stay here we will not bother you anymore, then when they decided that area was nice and they needed it for the white man. Then we began to take the black man out of Africa and use them on our plantations so the white man could get more money. The President ended slavery, but there were ways around it and everyone knew it. No one ever said any persecution of the black man is wrong for years and why not, because it was more convenient for us to ignore it. Now the people from Latin American countries have come in homes of freedom, and better lives. We tell them they have to speak English, since they are in America, but I do not recall being taught the language of the Native Americans. Since they were here first should you not have to learn that language?
money. The reason i think this is because the reason people go through all those
Corporate governance changed drastically after the case of Andersen Auditors, Enron’s auditing service showed that they contributed to the scandal. Andersen was originally founded in 1913, and by taking tough stands against clients, quickly gained a national reputation as a reliable keeper of the people’s trust (Beasley, 2003). Andersen provided auditing statements with a ‘clean’ approval stamp from 1997 to 2001, but was found guilty of obstructing justice by shredding evidence relating to the Enron scandal on the 15th June 2002. It agrees to cease auditing public companies by 31 August (BBC News, 2002).
The Enron Corporation was an American energy company that provided natural gas, electricity, and communications to its customers both wholesale and retail globally and in the northwestern United States (Ferrell, et al, 2013). Top executives, prestigious law firms, trusted accounting firms, the largest banks in the finance industry, the board of directors, and other high powered people, all played a part in the biggest most popular scandal that shook the faith of the American people in big business and the stock market with the demise of one of the top Fortune 500 companies that made billions of dollars through illegal and unethical gains (Ferrell, et al, 2013). Many shareholders, employees, and investors lost their entire life savings, investments,
The Tyco accounting scandal is an ideal illustration of how individuals who hold key positions in an organization are able to manipulate accounting practices and financial reports for personal gain. The few key individuals involved in the Tyco Scandal (CEO Kozlowski and CFO Swartz), used a number of clever and unique tactics in order to accomplish what they did; including spring loading, manipulating their ‘key-employee loan’ program, and multiple ‘hush money’ payouts.