Accounting Disasters and Changes in Financial Reporting Term Paper by Nicky

A look at the impact of corporate scandals on accounting and financial reporting.
# 146501 | 1,586 words | 7 sources | APA | 2010 | US

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This paper examines the connection between globalization and illicit corporate operations, with a focus on the Enron and WorldCom scandals. First, the paper discusses the changes that have occurred in financial reporting in the period after the accounting scandals at Enron and WorldCom. Then, it explores the scandals themselves, describing the nature of the irregularities in the corporations' financial reporting and its ultimate impact of company stakeholders. This is followed by a section on the need for change, which includes a list of suggestions which outline modifications which emerged from the analysis of several accounting red flags. That paper concludes by summarizing the need for change which addresses issues that refer to all players in the corporate reporting chain.


The Enron Scandal
The WorldCom Scandal
The Need for Change
Modifications in Financial Reporting
Concluding Remarks

From the Paper:

"By 1987, Enron has risen from scratch to become America's seventh largest company, employing 21,000 individuals in over 40 countries. Unfortunately however, it was proven that the company's success had been based on an "elaborate scam". The company's management had misused and wrongfully accounted their financial status. They even leaked false information to investment brokers in order to further attract investors. They inflated their profits and lied in corporate documents in order to preserve an image of a highly profitable organization. In all this, they had the help of audit organization Arthur Andersen (the audit organization also suffered greatly as a result of the scandal). When the first signs of problems were perceived by the public, the company kept on lying; but when investors begun to leave and the company's stock plunged overnight, Enron was forced to declare bankruptcy."

Sample of Sources Used:

  • Bautista, L.R., 2004, Implications and Effects of Sarbanes-Oxley Act, Securities and Exchange Commission, Retrieved from on March 13, 2009
  • Cooper, C., 2007, Extraordinary Circumstances: The Journey of a Corporate Whistleblower, John Wiley and Sons
  • Lee, H., Effects of Sarbanes-Oxley Act of 2002 and SEC Final Rulings on Auditor Independence, SUNY Institute of Technology, Retrieved from on March 13, 2009
  • Malpass, A., June 2, 2002, hp_:I/help artic/91719, Quoted by Hannon
  • August 22, 2002, Enron Scandal At-A-Glance, BBC News, last accessed on March 13, 2009

Cite this Term Paper:

APA Format

Accounting Disasters and Changes in Financial Reporting (2010, December 29) Retrieved June 03, 2023, from

MLA Format

"Accounting Disasters and Changes in Financial Reporting" 29 December 2010. Web. 03 June. 2023. <>