According to Accountingdegree.org, the Waste Management Inc. Scandal was included in “The Top 10 Worst Corporate Accounting Scandals of All Time.” Waste Management formed in 1894 by Larry Beck and it has grown tremendously over the years. What began as an idea, sparked from one person hauling garbage in a wagon, soon turned into a successful production that currently provides service to over 20 million customers. The industry states it “Partners with it’s customers and communities to manage and reduce waste from collection to disposal while recovering valuable.” Unfortunately, between the years 1992 and 1997 the well-running industry faced some unexpected challenges. Waste Management underwent a major accounting fraud. Dean L. Buntrock, the main driving force behind the fraud, Phillip B. Rooney, Thomas C. Hau, Herbert Getz, James E. Keonig, and
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Then, they took some salvage values and moved them to other assets with no salvage values. They didn’t record expenses for the decrease in the value of landfills or the expenses needed to write off the cost for the ineffective landfill development projects. They also didn’t create liabilities to pay for income taxes and other expenses, and much more. The accounting manipulations known as “netting” and “geography” were reported to be used by the defendants as a part of their scheme. They used “netting” to eliminate $490 million in expenses and “geography” to move tens of millions of dollars. These tricks make the public think the reported results are better than they actually are. However, Waste Management supposedly wasn’t the only industry who played a role in this scandal because Arthur Andersen LLP was accused of aiding them along the way. Andersen supplied multiple unqualified audit reports on the false financial statements from Waste Management. Audit reports is written from an auditor (Arthur Andersen LLP) that states its opinion on the financial statements of, in this case, Waste Management. The
Then, they took some salvage values and moved them to other assets with no salvage values. They didn’t record expenses for the decrease in the value of landfills or the expenses needed to write off the cost for the ineffective landfill development projects. They also didn’t create liabilities to pay for income taxes and other expenses, and much more. The accounting manipulations known as “netting” and “geography” were reported to be used by the defendants as a part of their scheme. They used “netting” to eliminate $490 million in expenses and “geography” to move tens of millions of dollars. These tricks make the public think the reported results are better than they actually are. However, Waste Management supposedly wasn’t the only industry who played a role in this scandal because Arthur Andersen LLP was accused of aiding them along the way. Andersen supplied multiple unqualified audit reports on the false financial statements from Waste Management. Audit reports is written from an auditor (Arthur Andersen LLP) that states its opinion on the financial statements of, in this case, Waste Management. The