Accounting Takes On Corporate Fraud
The world has recently been plagued with numerous cases of corporate fraud
. Remember Enron? In the year 2001, Enron declared bankruptcy. This declaration came only a year after supposed revenues approaching one hundred billion dollars. WorldCom also engaged in similar fraud. After an internal team of auditors secretly unmasked the scandal within the corporation, it was too late. WorldCom had inflated its numbers nearly eleven billion dollars! How could something like this have happened? The answer is fraud. Corporate executives were deliberately engaging in accounting fraud. In order to keep share prices increasing, false financial statements were created masked by accounting intricacies. Accounting is a division of a higher study called accountancy. Accountancy is the art communicating financial information regarding a business or entity to either shareholders or management. Accounting has a more refined focus, it is the art of recording and classifying all financial data of a business or entity. In other words, accounting keeps records of where money is coming from and where it is going. This is the reason accounting is often referred to as the "language of business." In order to properly make sense of things and understand the true stability of a corporation, solid accounting practices are essential. Therefor if corporate executives chose to "fudge the numbers" and report false data, investors can get the totally wrong impression. This type of fraud can be quite difficult to detect, so it is quite easy to see the important role this field of study plays out in maintaining a healthy marketplace. Entire markets can rise and fall within minutes of seeing financial reports.
The world is in need of more accountants with integrity. Most of the time corporate fraud can be detected by honest accountants on the inside. However, if honest accountants do not exist at the company or they are not willing to say anything, the fraud can continue on unchecked. Accounting is a very competitive field that demands a strong moral fiber. Accountants play vital roles in maintaining efficiency and confidence in the business world. Universities around the world offer excellent accounting programs. Being an accountant may be right for you. If you are a person of trust, confidence and integrity you may be able to make a big difference. Although the world has suffered many cases of corporate fraud and financial markets have been put in distress, this does not mean that it needs to continue this way.
by: Art Gib
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