Case 4.4 Waste Management

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FRAUD CONDITIONS Three conditions are often present when fraud exists; incentives, opportunity, and attitude. All of these conditions can be seen in the fraud at Waste Management. Waste Management was under pressure from other companies within the industry that could offer the same services at lower prices to customers. Dean L. Buntrock, founder, chairman, and CEO of Waste Management was the driving force behind the fraud. Buntrock set the earnings targets, fostered a culture of fraudulent accounting, and personally directed certain of the accounting changes to make the targeted earnings. Buntrock presented himself as a pillar of the community, all the while knowingly committing fraud to fund his endeavors. He perceived himself as…show more content…
• Physical examination of the assets to determine if they have been disposed of or are still in use.
• Review documentation about the assets in questions to determine if the proper useful lives and salvage values are being used.
SOX SECTION 206 According to Section 206 of the Sarbanes-Oxley Act of 2002, Conflict of Interest, it shall be unlawful for a registered public accounting firm to perform for an issuer any audit service required by his title, if a chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for the issuer, was employed by that registered independent public accounting firm and participated in any capacity in the audit of that issuer during the 1 year period preceding the date of the audit (SEC, 2002).
IDENTIFYING ACCOUNTING ERRORS Andersen may have allowed Waste Management to record the identified accounting errors because they wanted to keep their client happy and continue doing business with them. Waste Management was a major client of Andersen and has made a lot of money from the company over the years. This could have led to pressure on the accounting firm to stay on the good side of the company. Another reason
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