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Home > Accounting scandals of 2002

1.4 2003

• Parmalat
  • Calisto Tanzi

2 Sorted by Big Five auditor

• Arthur Andersen -- CMS, Cornell, Dynegy, Enron, Global Crossing, Halliburton, Martha Stewart Omnimedia, Merck, Peregrine, Qwest, Sunbeam, Waste Management, WorldCom
  • David Duncan
• Deloitte & Touche -- Adelphia, AES, Cendant , Duke, El Paso, Merrill Lynch, Reliant, Rite Aid
• Ernst & Young -- AOL Time Warner, Dollar General, PNC
• KPMG -- Citigroup, CA, GE, IM Clone, Peregrine, Xerox
• PricewaterhouseCoopers -- Bristol Myers, HPL, JP Morgan Chase, Kmart, Lucent, MicroStrategy, Network Associates, Phar-Mor, Tyco
• Coopers & Lybrand LLP -- Network Associates
• Gutierrez & Co. -- Vivendi
• Grant Thornton -- Parmalat

The Enron scandal has so far resulted in the criminal conviction of the Big Five auditor Arthur Andersen, and that firm has had to divest itself of its non-US partners .

There is a general perception that there are other accountancy scandals waiting to be uncovered, which has contributed to the 2002 stock market downturn.

On July 9, 2002 George W. Bush gave a speech about recent accounting scandals that have been uncovered. In spite of its stern tone, the speech did not focus on establishing new policy, but instead focused on actually enforcing current laws, which include holding CEOs and directors personally responsible for accountancy fraud.

In July, 2002, WorldCom filed for bankruptcy protection, in the largest corporate insolvency ever.

These scandals have reignited the debate over the relative merits of US GAAP, with its rules-based approach to accounting, and International Accounting Standards and UK GAAP, which favour a principles-based approach. The Financial Accounting Standards Board has announced it intends to introduce more principles-based standards. More radical means of accounting reform have been proposed but so far have very little support.

3 See Also

• Corporate abuse

4 External links

• Securities and Exchange Commission website
• Link to Bush speech
• A diagram of the scandals

5 Further reading

• John R. Emshwiller and Rebecca Smith, 24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America or Infectious Greed, HarperInformation, 2003, BooksEnthsiast.com

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