Bizcovering

Some may think IBM is known for its sterling business ethics and character. Many older people might remember the Watson family whose motto was, “respect for the individual”. Well much as Virginia Slims ads used to say, “You’ve come a long way baby.” IBM’s tag line should be you have fallen a long way baby.

Sometimes, corporate scandal may involve some sort of accounting fraud. Integrity is a quality that all practicing accountants should possess. An accountant should make sure that the financial statements he or she has prepared, fairly and accurately reflect a company’s financial condition as these information will influence decisions made by both internal (owners and management) and external parties (creditors, investors, government agencies). Here are just three of the many major accounting scandals that had plagued the corporate landscape in the past decade and how these indiscretions have affected the lives of thousands.

Allegations of misconduct abound in the corporate world nowadays. Corporate executives commit offenses that are markedly different from ordinary criminals. They do not hold up stores, steal cars, or shoplift; instead, they engage in frauds, receive kickbacks, trade stocks on inside information, and deliberately fail to pay government loans. The impact of their misdeeds can be tremendous, affecting the lives of people by the thousands. Here are five notable corporate scandals in history.

Prior to 1995, Daiwa Bank, Ltd., was one of the top twenty banks in the world in terms of asset size, and it was Japan’s twelfth largest institution.

The recreational cruise line industry is a $15 billion-a-year business that has been involved in many environmental crimes. From 1993 to 1998, at least 104 illegal discharge cases were suspected against foreign-flagged cruise ships, those ships that operate out of American waters but are registered to foreign countries, such as Liberia and Norway.

In theory, Japanese government construction contracts are awarded through competitive bidding. The catch is that, for at least a half century, the firms have been rigging the bidding through a cartel known as the dango (“conference” in Japanese).

Lately Wal Mart has been in the press a lot, both good and bad. Wal Mart has had to strike back critics, politics and many other problems. Both customers and CEO’’s have had to ask themselves how much of an empire is too much, how many “everyday low prices” is too many.

The scandals are inevitable. Time and again one or other scandal will come up. But how does a shareholder behave or react when it happens in one of the companies he had invested.