Cases

Front 1

Worldcom

Back 1

Broke expense recognition principle.
In 2000, senior Worldcom members directed several releases from accruals for other reasons to offset domestic line expense, therefore violating GAAP because the expense releases had nothing to do with the revenues associated with them

Front 2

Enron (control environment)

Back 2

The first thing was the executive incentive structure which linked executives’ salary increases and cash bonuses to reported revenues. Employees had the same powerful incentives to achieve high revenues and earnings targets because their holdings of Enron stock relied on the company performance.

Front 3

Enron with Anderson

Back 3

Enron and how they violated the idea of independence, which states that an auditor should not be involved with their client to a point at which the integrity of their assessment is questionable and their opinion is no longer unbiased. Aurther Anderson, Enron’s auditing firm, collected only 25 million for audit services whereas they collected 27 million for consulting and other services. Anderson had performed Enron’s internal audit since 1993 when Andersen hired 40 Enron personnel to be part of their team providing internal audit services

Front 4

Waste Management

Back 4

This case focused on the violation of the recognition and recording of an asset under GAAP by Waste Management. Their management team also used the process of basketing, which is combining the costs of impaired or abandoned landfill projects with the costs of a permitted site which violates GAAP

Front 5

Qwest

Back 5

Revenue recognition principle by stating revenues which were meant for the next year.