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To Analyzing Corporate fraud from the South China Sea "and" Enron

Author: ChenJianMin From: www.yourpaper.net Posted: 2009-11-02 21:01:13 Read:
Abstract: plaguing the biggest problem of the accounting profession than the distortion of information, at the same time, another social system, religion, culture, political system, and many other factors, makes the problem even more intractable. Only certified public accountant corporate fraud occurred blame it beneath the principle of "objective and fair". Only accounting fraud of this phenomenon in the broader social context, in-depth study, may have a deeper understanding of this problem.
Words: "South Sea Company"; "Enron"; fraud; system

A widespread and profound accounting fraud

The first large-scale human history on the capital market crisis is the "tulip" events of the 1630s, in 1721, the British South Sea Company bankruptcy audit case the best comment on market speculation and corporate scandals. 1990s, U.S. public company took place in a series of cases of financial fraud, such as Santo, sun electrical, waste management, Lucent Technologies, etc.. In November 2001, U.S. Energy Enron exposed the scandal then called "Enron was sector. Followed by U.S. listed company after another outbreak of a series of stunning corporate scandals: World Communications, Time Warner, Merck, ImClone, Adel A Theoretical and Xerox fraud. Even Microsoft, Cisco, Boeing and GE, like the big multinationals not miss this opportunity to come along for the ride.
1990s in China have also broke out in a series of corporate scandals, from the "the youngest case" - Shenzhen wilderness event, the Beijing Great Wall Electrical water events and Hainan international events to the "new case" - Joan source case, red stock cases as well as the Dongfang Boiler cases, "Abandonment" in recent years, "Mai Kete," Zheng Bai Wen "," Oriental "," Dawn of shares "," international aspect "," Lam Tin Shares "," Chongqing Titanium Dioxide, Tonghua Gold Horse "and" Neptunus Bioengineering "series of events.
Is not difficult to find, whether multinational or domestic enterprises, whether state-owned enterprises or private enterprises, regardless of the existence of the corporate history up to a hundred years or just registered enterprises listed on all corporate fraud exists.

Second, from the South Sea Company bankruptcy to see government regulation and corporate fraud

The South Sea Company was founded in 1711, it was established the main purpose is to facilitate trade expansion by the British government of South America. 1718, the total national debt accumulated to 1,000,000. In order to raise debt capital quickly overwhelmed the British Government has made a bold decision, the South Sea Company stock sold to the public. It rally said they found gold, silver, spices like something in the region, how to make money. Subsequently, the stock price soared, the acquiescence of the government, the company's management made up one after another wonderful story for the South Sea Company. Soon, people began to believe that the South Sea Company mirage profit prospects, the British public is extraordinary fanaticism instantly evoke. Next, the public began trying to find a second, third South Sea Company, for a time, the class of the South Sea Company mushroomed into being. The setting up of such companies from January 1720 to June period amounted to 161. These classes are the establishment of the South Sea Company, a tremendous shock to the interests of the shareholders of the South Sea Company, including many members of the British Parliament, and even the time of King George, in order to safeguard their own interests, the British Parliament in 1720, June 11 passed the "the foam companies banned Act strictly limit the application of the AG also cancel the concession has been granted to some companies. Unfortunately, these measures did not save the South Sea Company, a financial panic in 1720, and eventually spread to the South Sea Company.

Third, government officials and stakeholders with the Enron fraud

Enron was founded in 1930, originally named the the northern gas companies, later renamed the "Enron (Enron). "Fortune" magazine from 1996 to 2001, the sixth consecutive year the Enron named "America's most innovative companies, Enron in 2000 the magazine named" America's 100 Best Employers ". At the moment the Enron entered the pinnacle of his career. However, the second half of 2001, the situation has worsened. SHARON Wotejinsi, August 2002 "Time" magazine as one of the three man of the Enron vice president, wrote a letter when he was chairman of Enron Kenneth Levin whistleblowers "Enron financial fraud anonymous letter. September, forced Arthur Andersen huge pressure, coupled with the deadly impact of the "9.11" on the U.S. stock market, "Enron" significant accounting errors and adjustments. October, "Enron" Suddenly there is nearly $ 600 million loss for the quarter financial report, when the Enron shareholders' equity has shrunk by one-third, more than 70% of the profits is fictional, results, Standard & Poor's and Mudi Si "Enron" credit downgraded to junk class. Subsequently, the United States Securities and Exchange Commission involved in the investigation, Enron was forced to cook the books undertook. November, Enron stock day slump, hit the New York Stock Exchange and Nasdaq Stock Market the most single-day decline ever. December, Enron filed for bankruptcy protection to a New York court, the assets listed in the bankruptcy list of up to $ 49.8 billion, marking the largest ever bankruptcy filing in the United States record. January 19, 2002, the U.S. Department of Justice began to undertake a thorough criminal investigation of Enron. As of March 8, 2003, up to more than 2100 pages of the latest survey report submitted by the bankruptcy court appointed censors Neil Bateson Enron in late 2000 by SPE to conceal liabilities up to more than 110 billion dollars.
More shocking, 15, 2002, the United States, Texas, announced a series of sensational dossier file, one of the many letters, he served as governor of Texas, President Bush and Enron's former president Kenneth Levin maintained a "close" relationship. When George W. Bush in the 2000 presidential election, the group of elite "Bush pioneer group" for him to raise at least $ 100,000, while Levin is one of the backbone. In addition to the president himself, the White House, there are many senior figures and Levin touch on the relationship. Bush in power, the White House has set up an energy policy group, led by Vice President Dick Cheney directly. In fact, Cheney and Enron Chairman and CEO Kenneth Lay is also an old acquaintance. In fact, with Enron in the past very close to the Washington government officials far more than Cheney one, Secretary of Defense Donald Rumsfeld, Attorney General John Ashcroft, U.S. Trade Representative Robert Zoellick, the White House economic adviser Lindsey even kept their promises in the economic circles of the United States Federal Reserve Chairman Alan Greenspan, Enron's guest of honor. Reagan, Bush senior men's number one confidant James Baker, in 1992 to help Bush Sr. after the defeat of the Clinton campaign, it was Levin income enough as Enron consultant. Levin has been a lot of dollars out at large, well versed in power with money or steal it. Some have been conducted in statistics, President George W. Bush in his political career, received a total of Enron donated $ 623,000. In addition, Senator Phil Gramm (Republican of Texas) to accept Enron donated $ 97,350 to Senator Kay Bailey (Texas Republican) to accept Enron donated $ 99,500 to the Chairman of the Commodity Futures Trading Commission Wendy Gramm (Enron trading varieties will be supervision by the Commission), after which he was a director of Enron, Enron chairman Kenneth Lay and CEO Jeffrey Skilling were an individual total Republican politicians donated $ 793,110 and $ 393,882.
Is not difficult to find, and led to the bankruptcy of Enron addition to its corrupt practices, as well as the instigation of the government stakeholders. When Enron heyday, the media as an industry elite, most creative enterprise;, the media and the first Enron vocal opposition, the media, the Ins and Outs of attitude is somewhat awkward. Similarly, the lawyers on behalf of justice and fairness, to reap huge gains from Enron, they the Enron SPE conceal losses in the face, and ultimately choose silence In this sense, their majesty What is, what is justice, conscience ah! Investment banks in the Enron securities regulatory chain plays multiple roles of lenders, securities underwriting, merger advisers on Enron's fraudulent activities can not shirk its responsibility. They help "create a false impression of the Enron deceive investors, shareholders and assessment company. They deliberately designed a series of false financial transactions, such as helping "Enron" to establish a secret partnership with overseas companies to hide Enron's loans and provide convenience for the sale of Enron overpriced assets. These practices are not only not in the book on the Enron debt appear, "Enron" and also to make profits appear swollen. In addition, credit rating agencies like Standard & Poor's and Mudi Si, Wall Street financial analysts and financial analysts, they are what kind of role in it? There are poor "scapegoat" - Arthur Andersen accounting firm. "Enron" Since its inception, the financial statements have been executed by the Arthur Andersen accounting firm audits, however, many of the predecessor of the senior management of Enron employees are Arthur Andersen, Enron CFO, Chief Accounting executives and corporate development vice president, previously worked in Arthur Andersen. Coupled with the rise of the forensic audit services business, the Arthur Andersen audit of the late gradually deviated from their original track. Enron, Arthur Andersen's second largest customer in 2000 paid to Arthur Andersen cost of $ 2 million, $ 7 million from advisory services, consulting services for Arthur Andersen to Enron even including the the SPE transaction planning consulting, bookkeeping and outsourcing of internal audit services. Accounting fraud simply be attributed to a certified public accountant Immoral not objective, and fair
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