The 1998 Waste Management Scandal And How It Changed The

1201 WordsApr 25, 20175 Pages
The 1998 Waste Management Scandal and How It Changed the Accounting World This scandal took place in Waste Management Inc. a company which is located in North America. The company offers waste hauling and other environmental management services. The company was started in 1894 by Larry Beck, in addition, the company also operates in air and gas management, environmental engineering, and protection of groundwater. The company grew bigger and became the largest waste management company in the entire North America during 1971 and was known more publicly after its revenue increased to $82M. The company provided waste management and other environmental services to about 20 million people within America, Puerto Rico, and Canada. It later became…show more content…
In addition, SEC’s associate director of the enforcement Division, Thomas Newkirk, said that the financial fiasco which took place at Waste Management Inc. was a very serious fraud but even after the officers had violated the federal laws they still held their jobs and no legal action was taken against them. Buntrock was the mastermind behind the whole scandal, while, long-time company’s auditor, Arthur Anderson aided the fraud by issuing false annual audit reports and financial statements and used accounting tricks to hide about $1.7 billion in company expenses between 1992 and 1997 (Newkirk, 2002). The judgments of the court permanently barred these officers from participating in any of the company’s activities or acting as company officers. Nevertheless, they were not to violate or help in violating the laws of federal securities at any capacity, in addition to the bar they were also fined an amount totaling to over $30 million. How the Scandal affected the Accounting world today The financial fraud, which took place at Waste Management Inc., brought a number of changes in the accounting world which are being experienced currently in the world. First, it awakened investors to the crisis in the accounting world. For instance, Roger Hamilton, a manager of John Hancock Value Funds, succeeded in unloading $600,000 of his shares before total collapse of stock, even though he

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