Waste Management Presentation

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Terms in this set (16)
avoided depreciation expenses of assets.
assigned arbitrary salvage values to other assets that previously had no salvage value.
failed to record expenses of landfills with decrease in value and abandoned projects.
excess reserves use to avoid recording of unrelated operating expenses.
improperly capitalized a variety of expenses.
"netting" and "geography". netting - reducing credit. geography - moving around numbers.
"making the finanncials look the way we want to show them" - koening
ethical theoriesthe players in the scandal were all driven by egoism. each man made unethical choices in the name of profit, then chose to cover up the scheme to avoid being punished. arthur andersen did not want to lose its client fees so it violated its purpose.outcomeshareholders lost more than $6 million in market value of investments. waste management was bought and merged with a smaller company. waste management paid $457 million in a class action suit to shareholders. arthur anderson was fined $47 million. fraud accounting lawsuit against former executives was settled for $31 million. the former executives were banned from serving officers in a public company. NO PRISON TIME FOR THE EXECUTIVES.how could it have been avoided?follow GAAP. employ a completely independent external auditor. improve your business model to reach targets, DO NOT use accounting tricks to make yourself seem more profitable then you are. speak up when confronted with fraud, even from your boss.How many executives went to prison? A. 0 B. 1 C. 2 D. 3A. 0What accounting violations did Waste Management undertake during this period? A. improper capitalization B. avoided depreciation C. Excesses reserves to avoid operating expenses D. All of the aboveD. All of the above.Which accounting firm did Waste Management employ at the time? a. PWC b. KPMG c. Arthur Anderson d. EYc. arthur anderson