Manuel Ortiz
Holly McCracken
May 19, 2010
“Accounting Fraud in Management”
In Business Realities the topic I decided to discuss is Accounting fraud in Management. In The twentieth century this issue has been more of an issue than earlier
decades, because companies were recording all transactions and not having Financial statements to back them up, and they had control over there management spending habits. Management has control over there spending habits more in the twentieth century than any century before. I will give you examples on a few companies that have gone through financial problems due to the Management team doing illegal transactions, and they are not handing in the proper financial documents to there stockholders and there Board of Directors for review. In this research paper I will also discuss The Sarbanes–Oxley Act of 2002 and how they should have re-adjusted these laws before these big scandals broke.
Case # 1
“Bank of Credit and Commerce International (BCCI)”
“Bank of Credit and Commerce International (BCCI) was founded in Karachi, Pakistan in 1972 and registered in Luxembourg, London by Aga Hasan Abedi. It was a major international bank with 30,000 employees and had operations in 78 countries. It was the seventh largest private bank up to 1991 until it was closed.”
Allegations:
“This is one of the largest scandals in the financial history with $ 20-billion-plus-heist. More than $13 billion funds are unaccounted. Other allegations include bribery, support of terrorism, money laundering, smuggling, the sale of nuclear technologies etc.”
In 1991, assets were seized by regulations in seven countries, because they massive widespread money fraud in which totaled 800,00 effecting the bank’s depositors around the world. Regulators took more than 20 billion, and that is the highest failure in history today for any international bank. The losses are unknown but they do say that its about 15 billion or as high as 75% of the...