These days, a large amount of money in the area of shareholder values and market capitalization evaporate. That’s why major companies are required to re-state their financial results after that they are publicly announced. When any fraud is detected, different shareholder fines, suits, cash settlements, and legal fees can consume a lot of money, and this is what often leads even to ruining people’s lives.
As an example, there are many guilty executives who serve their time for this kind of tampering, including CFOs, CEOs, senior managers, corporate lawyers, auditors, etc. You should pay attention to one of the latest and most notorious examples of accounting frauds involving Cendant Corporation because this franchising and marketing company admitted its fraud that led to a huge accounting scandal in NY.
It’s not a secret that accounting scandals are a regular occurrence in the modern US business landscape, and there are certain suggestions that they will continue in the near future. The main reason is that the natural state of humanity remains unsatisfied so that people want to achieve greater success and they are not concerned with ethics. Nowadays, sins are a part of people’s nature, and that’s why greed will always find its nourishment in the entire business world. Accounting is the fundamental of any financial reporting, and corporate scandals in this field are called accounting frauds, and they often become true scandals because of the media.
Cooking the books, as most people know that, was called a white-collar crime when detected. In most cases, such activities were punished quite lightly, but now the business world that deals with results must bear more serious outcomes. That’s because a huge amount of shareholder value and market capitalization evaporate so that more and more large companies, such as Cendant Corporation, are starting to re-state their financial results after their official publication or announcement.
In conclusion, if you’re interested in the case of Cendant Corporation, this well-known franchising and marketing company admitted to use some irregular accounting practices a few years ago. As a result, over $500 million dollars were inflated as its earnings. When this accounting scandal became public, this major company lost a lot of its market value only in one day. It’s no wonder its executives were nervous, scared, and distressed.
These days, a large amount of money in the area of shareholder values and market capitalization evaporate. That’s why major companies are required to re-state their financial results after that they are publicly announced.