BIG Corrup$ion

BIG Accounting $candals

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Many of these accounting scandals listed below are shown on other pages of this website under other titles. This page gathers all to illustrate the large number of cases and the auditing firms involved.

Notable accounting scandals 1980 - 2011

Company Year Audit Firm Country Notes
Nugan Hand Bank 1980 Australia
ZZZZ Best 1986 United States Ponzi schemerun by Barry Minkow
Barlow Clowes 1988 United Kingdom Gilts management service. 110 million missing
MiniScribe 1989 United States
Polly Peck 1990 United Kingdom
Bank of Credit and Commerce International 1991 United Kingdom
Phar-Mor 1992 Coopers & Lybrand United States mail fraud, wire fraud, bank fraud, and transportation of funds obtained by theft or fraud
Informix Corporation 1996 Ernst & Young[10] United States
Sybase 1997 Ernst & Young[14] United States
Cendant 1998 Ernst & Young United States
Waste Management, Inc. 1999 Arthur Andersen United States Financial mistatements
MicroStrategy 2000 PricewaterhouseCoopers United States Michael Saylor
Unify Corporation 2000 Deloitte & Touche United States
Computer Associates 2000 KPMG United States Sanjay Kumar
Lernout & Hauspie 2000 KPMG Belgium Fictitious transactions in Korea and improper accounting methodologies elsewhere
Xerox 2000 KPMG United States Falsifying financial results
One.Tel 2001 Ernst & Young Australia
Enron 2001 Arthur Andersen United States Jeffrey Skilling,Kenneth Lay,Andrew Fastow
Adelphia 2002 Deloitte & Touche United States John Rigas
AOL 2002 Ernst & Young United States Inflated sales
Bristol-Myers Squibb 2002 PricewaterhouseCoopers United States Inflated revenues
CMS Energy 2002 Arthur Andersen United States Round trip trades
Duke Energy 2002 Deloitte & Touche United States Round trip trades
Dynegy 2002 Arthur Andersen United States Round trip trades
El Paso Corporation 2002 Deloitte & Touche United States Round trip trades
Freddie Mac 2002 PricewaterhouseCoopers United States Understated earnings
Global Crossing 2002 Arthur Andersen Bermuda Network capacity swaps to inflate revenues
Halliburton 2002 Arthur Andersen United States Improper booking of cost overruns
Homestore.com 2002 PricewaterhouseCoopers United States Improper booking of sales
ImClone Systems 2002 KPMG United States Samuel D. Waksal
Kmart 2002 PricewaterhouseCoopers United States Misleading accounting practices
Merck & Co. 2002 Pricewaterhouse Coopers United States Recorded co-payments that were not collected
Merrill Lynch 2002 Deloitte & Touche United States Conflict of interest
Mirant 2002 KPMG United States Overstated assets and liabilities
Nicor 2002 Arthur Andersen United States Overstated assets, understated liabilities
Peregrine Systems 2002 KPMG United States Overstated sales
Qwest Communications 2002 1999, 2000, 2001 Arthur Andersen 2002 October KPMG United States Inflated revenues
Reliant Energy 2002 Deloitte & Touche United States Round trip trades
Sunbeam 2002 Arthur Andersen United States
Tyco International 2002 PricewaterhouseCoopers Bermuda Improper accounting,Dennis Kozlowski
WorldCom 2002 Arthur Andersen United States Overstated cash flows,Bernard Ebbers
Royal Ahold 2003 Deloitte & Touche United States Inflating promotional allowances
Parmalat 2003 Grant Thornton SpA Italy Falsified accounting documents,Calisto Tanzi
HealthSouth Corporation 2003 Ernst & Young United States Richard M. Scrushy
Nortel 2003 Deloitte & Touche Canada Distributed ill advised corporate bonuses to top 43 managers
Chiquita Brands International 2004 Ernst & Young United States Illegal payments
AIG 2004 PricewaterhouseCoopers United States Accounting of structured financial deals
Bernard L. Madoff Investment Securities LLC 2008 Friehling & Horowitz United States Massive Ponzi scheme.[40]
Anglo Irish Bank 2008 Ernst & Young Ireland Anglo Irish Bank hidden loans controversy
Satyam Computer Services 2009 PricewaterhouseCoopers India Falsified accounts
Lehman Brothers 2010 Ernst & Young United States Failure to disclose Repo 105transactions to investors
Sino-Forest Corporation 2011 Ernst & Young Canada-China
Olympus Corporation 2011 Ernst & Young Japan tobashi using acquisitions

On MF Global Anniversary Something Still Missing

What’s still missing from this sordid affair is an accounting of the whereabouts of the financial auditor, PricewaterhouseCoopers. The global audit firm would rather come off as stupid than complicit in the actions of whomever broke the law and stole MF Global customer funds. PwC prefers you believe they were “duped” and given false or no information when executives took on inordinate risk with little or no oversight, and took advantage of lax or relaxed internal controls to double down with other people’s money in the noble hope they could “save the company” for investors including Corzine’s true boss,Chris Flowers.

Rest assured, “We were duped” will be the auditor’s defense when, and if, they are ever called to answer questions from the SEC, PCAOB, or a Senate/Congressional investigative committee. More likely the audit firm has been working behind the scenes to “help” regulators and the trustees makes sense of the transactions they were supposed to have been questioning while the firm was still viable. Most likely, in exchange for the promise of no prosecution, the firm has agreed to tell them where the bodies – the $1.6 billion –  is buried and point fingers at executives that lied to them or witheld information so the case against management will be stronger.

That’s how it works.

Whether civil, criminal, or private litigation, the auditors who are supposed to be standing up for shareholders and, in this case, customers who have a big stake in MF Global’s viability, are instead most worried about their own liability. And the lawyers play along. That’s how it was done at AIG and Huron, more PwC audit clients.

The audits of broker-dealers have not improved since Madoff. In fact they have probably gotten worse given the delay in enforcing the audit requirements under Sarbanes-Oxley and now Dodd-Frank. From another Forbes column of mine in August:

MF Global  – and PFGBest – were futures commission merchants, or FCMs, with broker-dealer subsidiaries. The ten futures commission merchants, or FCMs, with the most customer segregated assets under their control, almost $117 billion, as of June 30, 2012 according to reports filed with the CFTC, are audited in four cases by PwC. The rest are audited by one of the other Big Four audit firms. (A Big Four auditor obviously didn’t help safeguard customer funds any better at MF Global where the auditor is also PwC.)

Large banks have been sanctioned recently for commingling their broker-dealer customers’ funds with their own. JP Morgan, and its auditor PwC, and Barclays were fined in the UK for not safeguarding the funds of brokerage customers.

MF Global : 99 Problems And Auditor PwC Warned About None

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This website is dedicated to providing a reference source on the scourge that is whirling across planet Earth destroying governments, businesses, cities, families and imperiling civilized culture by agregating and making available on one site sources of news, analysis and opinion about corruption.
Criteria for inclusion on this site of "BIG Corruption" cases: 
  • Very High level corporate and/or government official(s) involved;
  • Very Large amount of money lost;
  • International financing/aid agency program; 
  • Global impact on numerous countries/businesses/investors; and/or
  • Classic example that can be used in training/seminarsmajor cases of global fraud and corruption.
     
  • As a news agregator website this site primarily serves to gather for research and educational purposes in one single place news and information specifically pertinent to major global corruption in business and government. The news items, views, editorials and opinions summarized or reported on this website are taken from the general media and reputable blogs, websites, etc., and are exclusively the responsibility of the original sources and/or authors. In accordance with Title 17 U. S. C. Section 107, any copyrighted work on this website is distributed under fair use without profit or payment to those who have expressed an interest in receiving the included information for nonprofit research and educational purposes only. Ref:  http://www4.law.cornell.edu/uscode/17/107html
     
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