![]() officers refused to make those adjustments that Arthur Andersen proposed. Arthur Andersen found errors in Waste Management, Inc.’s accounting books and would come up with adjustments and methods in which they could be fixed however, the Waste Management Inc. They hired Arthur Andersen, one of the Big Five firms, for the audit. was a publicly traded company, the company was required to audit their accounting books. Buntrock, along with the other stakeholders, let greed get in the way of operating the company in an honest and efficient manner.īecause Waste Management, Inc. The founder and CEO, Dean Buntrock, initiated a lot of the fraud and he himself was the company’s own founder. These officers had the opportunity to commit fraud within the company’s financial statements because they were all high up in the hierarchy of the organization. Compensation tied to earnings brings about a major culture of fraud in any occupational environment. The stakeholders, in turn, looked to committing fraud in order to protect their own lives. were to struggle in falling short of their earnings target, it would endanger the officers of the company. In a company such as Waste Management, Inc., officer compensation is tied to the earnings that the company produces. The chief officers recognized this and began to commit fraudulent activities as aforementioned in order for their financial statements to state what they wanted them to state. Revenues were not increasing as fast as they should have been. 1998 scandal occurred was in an attempt to meet predetermined earnings targets by expanding profits and pushing down or foregoing expenses. The reason why the Waste Management, Inc. restated its 1992-1997 earnings by $1.7 billion, which made it the largest restatement in history. Ultimately, the company had false profits moving into retained earnings, false assets, and no increase in liabilities on their financial statements. The company also used geography entries to move millions of dollars between the various line items on their income statement. This would defer expenses paid on the books. Another fraudulent activity included improperly capitalizing a variety of expenses. Netting helped eliminate about $490 million for operating expenses. also increased environmental reserves to avoid irrelevant operating expenses. In other words, this would extend the residual value of an asset that originally did not have any. In addition, the officers assigned salvage values to assets that previously had no salvage values whatsoever. This, in turn, stated less expenses on the company’s financial statements. Next, the officers also refused to record necessary expenses to write off the costs of unsuccessful and discarded landfill development projects. By doing this, it would state less expenses for the company, when in reality, there should have been more added for this. Moreover, another fraudulent activity that occurred with the accounting books was how the officers were refraining from recording expenses for any decreases in the value of the landfills. Every year, depreciation expense must be included in a company’s financial statements as the assets owned become used up and do not have the same value as it originally had. One of the fraud activities that occurred was avoiding depreciation expenses by assigning and inflating salvage values and extending the useful lives of the garbage trucks that the company owned. The senior officers at Waste Management, Inc., which included Dean Buntrock (Founder and CEO), Phillip Rooney (Former President), Thomas Hau (CAO), James Koenig (CFO), Herbert Getz (General Counsel), and Bruce Tobecksen (Vice President of Finance), began to engage in fraudulent activities involving the company’s accounting books. experienced many fraudulent crimes within its company between the years of 19. It was able to manage millions of tons of materials in many different facilities. to become the largest waste management and environmental services company in the country. acquired Service Corporation of America, which led Waste Management, Inc. In the years of the 1980s, Waste Management, Inc. The company offered environmental services to almost 20 million customers in America, Canada, and Puerto Rico. ![]() The company went public in 1971 and by 1972, the company was generating about $82 million in revenue and had made 133 acquisitions. is a comprehensive waste company that was founded in 1894 in North America by Larry Beck.
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