Course Title:

“Business Policy”

“Assignment No.1”

Submitted To:

Dr. Fozia Malik

Submitted By:

Areej Tajammal

Registration Number:

2022-BBA-015

Date of Submission:

16th-October-2023

Department:

Bachelor’s of Business Administration

Group-B

Major:

(Human Resource Management)

 The World's Biggest Accounting Fraud Scandals

Sr. No. Scandal Name Organization Year of expose/ Amount

bankruptcy hidden/loss

1. Lehman Brothers - Lehman Brothers September 2008 $50 billion

Repurchase agreements

2. Bernard L. ----- Tricked investors

Bernie Madoff - Ponzi Madoff out of $64.8 bn
scheme Investment
Securities LLC

3. IT services and Falsifying 50

Saytam - Falsifying back-office 2009 billion rupees.
records accounting firm
Saytam

4. Enron - Hiding debts Enron (Energy 2001 losing $74 billion

Scandal company)

5. Treaty of Utrecht - Accounting frauds In 1720, the UK

Concealing information by Uk companies signed the Treaty Not confirmed
of Utrecht 1713
with Spain,

6. WorldCom - Inflated WorldCom 2002 accounting nearly $11bn.

revenues & assets scandal

Recent Cases

7. Carillion - construction Liquidation, with

Misrepresenting figures company May, 2018 a £900 million
Carillion debt pile and a
£600 million
pension deficit.

8. KPMG - Auditing failures Company’s 2013-2014 fined £2.1 million

accounting
 department

9. The Kraft Heinz The Kraft Heinz

Company - Inflated cost Company 2021 Penalty of $62m.
savings

10. CHS - False financial The global

statements agribusiness, 2014 and 2018. Not confirm.
CHS.

11. Granite Construction - Civil engineering

Inflation of financial and infrastructure August 2022 $12m
performance firm Granite
Construction

12. Patisserie Valerie - False Patisserie Valerie. October, 2022

entries in ledgers Not confirmed

13. Americanas SA - Supplier Brazilian retailer $4 billion

finance Americanas SA. 2022
Sr. No. Reason
1. Sold toxic assets to
Cayman Island banks.
Tricked investors out of
$64.8 bn through the
2. largest Ponzi scheme in
history.
3. Saytam admitted to Founder and Chairman
falsifying revenues, Ramalinga Raju and his
margins and cash balances
to the tune of 50 billion
rupees.
Company kept huge debts
from the balance sheet,
4. which resulted in
shareholders losing $74
billion, thousands of
employees and investors
losing their retirement
accounts, and many
employees losing their
jobs.
A Parliamentary inquiry
5. revealed fraud among
government members, Exchequer John Aislabie
including the Tory
Chancellor of the
Exchequer John Aislabie.
6. Furthermore, WorldCom's
CEO, Bernie Ebbers,
failed to accurately report
line costs by capitalising
instead of expensing
them. He was also guilty
of inflating revenues by
recording fake entries.
Person Responsible For Impact
Lehman Brothers Became bankrupt.
Madoff and his Madoff was sentenced to
accountants David 150 years in prison and
Friehling and Frank was issued a $170 billion
DiPascalli restitution bill. Friehling
and DiPascalli were also
given prison sentences.
They were charged with
breach of trust,
brother conspiracy, cheating and
falsification of records,
they were released after
the Central Bureau of
Investigation failed to
file charges on time.
CEO Jeff Skiling was
CEO Jeff Skiling sentenced to 24 years in
prison. Former CEO Ken
Whistle blower: Lay was also sentenced
Sherron Watkins to prison but died before
serving time.
Tory Chancellor of the Tory Chancellor of the
Exchequer John Aislabie,
who was sent to prison.
WorldCom's CEO, In the end, this fraud
Bernie Ebbers resulted in over 30 000
people losing their jobs
and investors losing
over $180bn. After the
discovery, the company
filed for bankruptcy.
Ebbers was sentenced to
25 years in prison after
he was found guilty of
fraud, conspiracy and