Waste Management Fraud

1779 words 8 pages
Show More
Waste Management Fraud
Waste Management, Inc. today is dedicated to serving our communities by collecting and disposing of garbage and recycling. Over the years they have had to deal with a rise of issues such as environmental and global warming. Waste Management has also tried to reduce its waste collections while turning any valuable resources it can into clean and renewable energy. Waste Management has been around since the late 1800’s, and is a holding company that has all its daily operations conducted through its subsidiaries. Since there are relatively few garbage disposal companies around, Waste Management has been able to grow and advance into a huge corporation that has built an employee base of 45,000. And with any growing …show more content…

But the executives repeatedly refused to make the adjustments and finally entered into a secret agreement with Arthur Anderson to write off the “errors” and actually change the accounting practices for future periods. And if this wasn’t bad enough, the fact that most of the executives involved in the scheme had at one point worked for Arthur Anderson as auditors and 14 former employees of Arthur Anderson had worked for Waste Management in key accounting positions. It was also reported in the SEC report that Arthur Anderson had a related entity and billed millions of dollars for non-audit fees for a business structure designed to increase shareholder value. So not only did Arthur Anderson help Waste Management get away with the scheme, it looked like they were also profiting as well. Arthur Anderson could have stopped this scheme in the very beginning but they didn’t.
In mid-1997, Waste Management got a new CEO and this new CEO wanted a review of the company’s current accounting practices which ultimately led to the restatement of the Company’s financial statements since 1992. After the statements had been restated, the company acknowledged that it had misstated earnings by about $1.7 billion. This led to Waste Management’s current shareholders to lose over $6 billion in market value for their investments. Stock price dropped by more than 33% because of the restatement. All of the top executives were fired and in the weeks and months after, a total of three

Related

  • Fraud Cases: Violations of Generally Accepted Accounting Principles (Gaap)
    1081 words | 5 pages

    Fraud Cases: Violations of Generally Accepted Accounting Principles (GAAP) Section 1 In July 2002 the Sarbanes-Oxley Act was passed by the U.S. Senate by a vote of 98 to 0. The bipartisan support for the legislation emanated directly from the investing public’s lack of tolerance for financial statement fraud. Not surprisingly, when formulating its post-Sarbanes technical audit guidance, the Public Company Accounting Oversight Board (PCAOB) made it clear that detecting fraud must be the….

    Show More
  • Arthur Andersen
    1508 words | 7 pages

    partnerships, the Fed decided to open up an investigation on Anderson. When Anderson’s top management realized that the fed was about to begin an investigation on them, employees were “suggested” to shred piles of documents and emails from the Enron case that could have been used as evidence against them in court which was a huge felony. Moreover, investigations on Enron exposed Anderson employees of aiding and abetting the fraud that existed in Enron. The Department of Justice issued the indictment because….

    Show More
  • Case Analysis Arthur Andersen: Questionable Accounting Practices
    1021 words | 5 pages

    Case Analysis Arthur Andersen: Questionable Accounting Practices ●Introduction Arthur Andersen LLP, which is over a span of nearly 90 years, would become one of the "Big five" largest accounting firms in the United States. Moreover, the accounting firm seen as the symbol of trust, integrity and ethic. The good reputation is derived from the advent of consulting business, which was developed by Leonard Spack. However, with the growth of consulting services, many accounting firms viewed it as a sccessful….

    Show More
  • What Is Your Evaluation of the Effectiveness of the U.S. Health Care System in the Context of Delivery, Finance, Management, and/or Sustainability? What Are the Issues That Prompted a Need for Health Care Reform?
    873 words | 4 pages

    What is your evaluation of the effectiveness of the U.S. health care system in the context of delivery, finance, management, and/or sustainability? What are the issues that prompted a need for health care reform? Support your answer with a credible data reference. Do not use a reference already used by another student. Health care reforms is one of the biggest issue for voters. With our aging population, complexity of illness and growing cost of health care, the government need a new approach….

    Show More
  • SOLUTIONS MANUAL to accompany MODERN AUDITING & ASSURANCE SERVICES
    4892 words | 20 pages

    audit activity can be undertaken in the private or public sector, by an internal or external auditor, or as an one-off project or an ongoing engagement. Sometimes performance audit may also be referred to as a value-for-money (VFM), operational or management audit. The term ‘performance audit’ is usually applied in the public sector, with some application in the private sector; the other terms are common to both private and public sectors. The Australian National Audit Office (ANAO) defines a performance….

    Show More
  • Why Is It Important for External Auditors to Be Independent? Relate Your Answer to the Primary Role of External Auditors. Give Examples of Specific Ways the Lack of Auditor Independence May Impact Adversely on an Audit.
    1662 words | 7 pages

    world. The crash of Enron in US, followed by worldwide collapse of its auditor, Arthur Andersen. It was a greatest corporate failure uncovered in business history. Follow the Enron-Andersen scandal, massive organizations like WorldCom, Xerox and Waste Management….

    Show More
  • The Relationship Between Hospitality and Tourism
    1647 words | 7 pages

    liquor, to ensure that patrons do not become unduly intoxicated and subsequently a problem for management, staff and the….

    Show More
  • EST 1 Task 310.2.1-05
    1053 words | 5 pages

    of, a volunteer from the food bank pick up the outdated product that would otherwise be thrown away at the end of the workday and transport it to the local food bank. Another way would be to have management deliver the product to the food bank, by doing it this way would really show that the management is really involved with the community and cares about the needs of those that have….

    Show More
  • BSHS 375 WK 1 Individual Assignment Interoperability Paper
    1037 words | 5 pages

    also facilitate the firm to mitigate the duplication expenditure and costs for building, maintaining and updating redundant systems. The transparency through interoperability across programs will also enhance the capability of systems to reduce fraud, waste and abuse. Back up: The backup and recovery plan regarding the interoperability is discussed below: Some of the techniques that are employed for back up are discussed below. The techniques vary according to the data that is required to be back….

    Show More
  • Smackey Dog Food You Decide
    1402 words | 6 pages

    Keller CPA’s has a responsibility to communicate, in writing, to Smackey’s management all of the significant deficiencies and material weaknesses that they found. The first issue that would qualify is the way inventory is handled on the docks with there being only one employee in charge who can easily (and is) manipulate the system….

    Show More

Popular Essays