Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
In a world of ever-expanding technology, no one would bat an eye on a laboring force being fraudulent, especially a dirty one. Many wonders if their actions fall under “fraud, “but what is fraud?” Accounting fraud or corporate accounting scandals are political and business scandals that rises when disclosure of misdeeds by trusted executives of large public companies. A public company that falls under “creative accounting” can amount to fraud and an investigation is typically launched by government agencies. Some key takeaways include the intentional use of misleading information to deprive another entity of money, legal rights, or property. The party making a false statement know or believe that it is knowing deceiving other parties. Not to be confused with a “hoax.” Hoax actions are without the intention of gaining or damaging another person’s image. Offenders enacting fraud are condemned as criminals. Punishments for fraud can include a combination of prison, fines, and payouts to victims. Some of the ways a corporation can infringe on accounting fraud are by misdirecting overstating revenues, and funds, understating expenses and overstating the value of assets. Waste Management was prominent during its early operation. They manage and reduces waste, keeping urban area sanitize. They also collect and recycle waste, providing a necessary reduction in economic “footprint.” Soon after Waste Management went public, it raised a few eyebrows. The people that were involved in the scandal mainly consist of executives such as CEO, CAO, VP, etc. This “allegedly” bypassed regulation and self-pocketed a big potential expense. The misuse of executive power toward their financial statement created accounting fraud.
The culture environment within Waste management mainly consists of its executives and the manipulative power of money. Prior to the scandal, the shareholder that controls the organization is the Chief Executive officer. The CEO has overall responsibility for creating, implementing, planning, and integrating strategic direction for an organization. It includes responsibility for all departments of a business. In the position, the CEO must have at least a MA in business administration and an understanding of all departments within an organization. Furthermore, the CEO needs to have an in-depth knowledge of the corporation’s finance and performance management.
An officer who responds to the CEO is the Chief administrative officer. CAO manages its operation and is sometimes called the chief operating officer. CAO plays a key role in providing instructional leadership to department managers and reviewing the administrative policy. The qualification of this job title isn’t too different from another department. Basic education with a Bachelor of Science in Business Administration or MBA suffices for the position. The hiring points for the position are the demonstration of their knowledge in management, including global management, accounting practices, social responsibility, and financial management.
The Chief Financial Officer (CFO) of an organization had the responsibility for the implementation, planning, managing, and running of all the fiancé activities. The position also ensures the credibility of the finance group by providing accurate analysis of budgets and forecasts. The qualifications consist of accounting and finance, so they mainly work hand-to-hand with those departments; The role takes a lead position of developing, maintaining, and implementing a comprehensive job cost and overseeing all aspects of finance and accounting functions of the organization. Being the head of finance, MBA or CPA is the hiring factor. With that being said, CEOs are the same as an accountant within the organization, having a CPA for accounting. CEO also need a strong understanding of financial departments like accounting, auditing, and finance.
With a strong emphasis on management, the majority of officers influence a big portion of financial departments such as accounting and finance. An accountant in a firm analyzes financial information and prepares finical reports, and coordinates the implementation of accounting “control.” They provide guidance to other finance personnel for proper internal and external financial accounting procedures and applications. The job title requirement includes BA and a four-year work experience or three-year relevant work experience. Accountant or accounting department within an organization directly respond to CFO who respond to CAO and to the CEO. This hierarchy goes upward, providing a management system whose officers mainly control.
When the company becomes public after Waste Management opened its operation in 1894. Between its operation years 1992 and 1997, Waste Management experienced many fraudulent crimes. Dean Buntrock, CEO of the company was the driving force behind the fraud. He set a culture of fraudulent accounting earnings targets, personally directed certain accounting changes to make the targeted earnings, and was the spokesperson who announced the company’s fake data. At the same time, Buntrock posed as a promising entrepreneur. He used his illegitimate gain from the company to present himself as a trustworthy leader. After Buntrock become the forerunner of the fraud, Phillip Rooney, the former president took charge of building and the profitability of the company’s core solid waste operations and took control over the company’s largest subsidiary. He ensured that all write-offs were not recorded and, in some instances, overruled accounting decisions that would have a negative impact on the organization’s operations. In the background of the operation, James Koenig, CFO, is primarily responsible for executing the fake earning plan. He also ordered the destruction of damaged evidence, and the culture of fraudulent accounting, and misled the company’s audit committee and internal accountants. Along with CAO Thomas Hau and Vice President of Finance, Bruce D.Tobecksen took total control of the company books. Hau advised the technician about the fraudulent accounting. He devised many “one-off’ accountings to deliver Buntrock’s goal of targeted earnings. On the other hand, Tobecksen was an “expert,” in accounting who was Koenig’s “right-hand” man. Initially, when Waste Management went public, Arthur Anderson, one of the “Big Five” become handled their audit. Anderson became the most important asset to the company. In fact, Koenig, and Hau were trained by Anderson in the past, so they had a “cozy” relationship. Knowing this, Tobecksen was also an auditor manager for the company and had worked with Anderson in the past for more than 30 years and quickly bribed Anderson, a federal offense. In addition, Waste Management also increased environmental reserves to avoid irrelevant operating expenses which helped eliminate about $490 million in operating expenses.
At its face value, the big players of the company repeatedly practice accounting fraud. In the short term the scandal, was very beneficial for a company such as Waste Management to hit its target earnings as officers’ earnings are tied to the company’s earnings. “If Waste Management, Inc., officer to struggle in falling short of their earnings target, it would endanger the officers of the company.” (“Ellrich, Neal, Smith & stohlman, P.A.” 3) As Stakeholder sees it, they committed fraud in order to protect their own lives. Earning tied to the earnings of a company brings about a major culture of fraud within the company’s environment. The officers had the opportunity to commit fraud as they were high up in the hierarchy of the organization.
In the long term, Waste Management’s officers were hit hard with punitive punishment; However, the company was able to continue its operations. The company is still serving its clients and the public with waste services such as recycling and disposal. However, they suffered consequences due to their five-year period of fraudulent reporting. The company was able to recover from its losses and charges filed against them. The company is still currently the largest solid waste provider in North America.
After the storm was over, a new CEO ordered a new restatement of the company, and all the major players that were involved in the fraud were slapped with a huge punitive punishment. The news of the company’s overstatement of earnings became public and Waste Management shareholders lost more than $6 billion in the market value of their investments when the stock price dropped by more than 33%. In order to eliminate the opportunity for a recurrence, the CEO, CFO, or COA that has a direct influence on the financial statements of the company would have had to be replaced.
Executive misconduct idolizes their power of control over another department by bypassing policies and enacting fraud within the organization. Fraud’s key feature includes a false statement of a fiancé with the intention of personal gains. Although Waste management is a great organization that conducts waste; They had taken a bad turn with their senior officer. An officer within waste management operated outside of policies that only benefited them. Creating false numbers to reach CEO earning goals and handling or destroying any evidence that might lead to an officer’s downfall. Buntrock, Rooney, Koening, Hau, Tobecksen, and Anderson were fined by the court. With the exception of Anderson, officers of Waste Management were terminated and replaced. Waste Management finance took a while to recover but continue its services. So, did Waste Management enact fraud? Yes, even as dirty as the job sound; The organization had a well-established hierarchy that pulls in heaps of revenue.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.