Some of the greatest accounting scandals of all time have rocked the financial and even political worlds with their repercussions, and have been felt from Wall Street to India. The majority of these scandals are perpetrated on the investors of the companies in question, who were falsely led to believe that the company’s financial situation was better than it actually was.
Such misdeeds generally involve complex accounting methods that skillfully hide the real situation from prying eyes. In other cases there’s no skill or subtlety at all, and the books are flat-out falsified to tell the story the fictional author wants told, which is usually that the company is doing great, and it’s stock price (and the wealth of its owners) should increase. This can be accomplished in a number of ways, including overstating the value of corporate assets, understating the existence of liabilities, showcasing an over-exposure of revenues and/or under-exposure of expenses, etc. There many tricks of the trade for unscrupulous accountants.
It’s also interesting to note that many of these most egregious accounting scandals of all time have taken place within just the last 15 years or so, prompting the question of why this is the case. Is the modern stock market to blame, a system which now emphasizes making off with fast gains rather than investing in companies for the long haul and seeing gradual increases in one’s investment? Or are there other factors that are causing more and more executives to try and game the system and make off with billions of dollars before anyone’s the wiser for it?
Here, we present you with a list of the ten biggest accounting scandals of all time to try and make sense of the chaos. The list is in chronological order, rather than trying to break down the scandals into their significance or monetary loss. Instead we want to focus on how the scandals happened. If you’re interested in more on this topic afterwards, be sure to read our article on The 10 Biggest Corporate Scandals In Modern History.