Alan Vincent
"Have nothing to do with the 
 fruitless deeds of darkness, but 
 rather expose them." Eph 5:11


A Spiritual Discernment Ministry


10 Major Accounting Scandals

Very recently, the scandal of Satyam Computer Services stunned the corporate world.

This is the first major accounting scandal in India and one of the major accounting

scandals in the world.

There are many such accounting scandals in history.

The following are some of the major accounting scandals.

Though these scandals are not a new thing, every time many people particularly of that company and investors are suffering from major losses in these incidents.employees

It is difficult to expect such scandals prior to the exposure as these involve complex methods for misusing funds, overstating revenues, understating expenses etc.

Bank of Credit and Commerce International (BCCI)

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Bank of Credit and Commerce International (BCCI) was founded in Karachi, Pakistan in 1972 and registered in Luxembourg, London by Aga Hasan Abedi. It was a major international bank with 30,000 employees and had operations in 78 countries. It was the seventh largest private bank up to 1991 until it was closed.


This is one of the largest scandals in the financial history with $ 20-billion-plus-heist. More than $13 billion funds are unaccounted. Other allegations include bribery, support of terrorism, money laundering, smuggling, the sale of nuclear technologies etc.

Enron Corporation

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Enron Corporation was founded in Houston, Texas in 1985. It was one of the world’s leading electricity, natural gas, pulp and paper and communications company which employed 22,000 people.  This America’s Most Innovative Company lost its fame in 2001 with its accounting fraud. It is quite common for corporate scandals to be called as an Enron scandal. 


The debts of the company were hidden and profits were inflated by more than $1 billion. It offered bribes to foreign governments to win contracts abroad.


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WorldCom was the United States’ second largest long distance phone company that was founded in the year 1983 as LDDS. Bernard Ebbers is its CEO and it became LDDS WorldCom in 1995. After 19 years of establishments i.e. in 2002 the company’s accounting scandal came into exposure.


Underreporting interconnection expenses by capitalizing on the balance sheet and $3.8 billion cash is overstated as capital expenses rather than operating expenses.

Tyco International

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Tyco international was a global manufacturing company founded in 1960. Its operational headquarters is in Princeton, New Jersey. With 118,000 employees it is composed of security services, safety products, fire protection services, flow control, electrical and metal products.


CEO Dennis Kozlowski and former CFO Mark H. Swartz were accused of the theft of $600 million from the company in 2002.

Kanebo Limited

Kanebo Limited was a textiles and cosmetics group giant in Japan. It was originally established in 1887. It has 13,580 employees. In 2003 a major accounting fraud was revealed which was considered as the largest fraud in Japan.


Inflated profits by $2 billion over a five-year period.

Waste Management, Inc

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Waste Management, Inc is founded 1894 based on the headquarters in Houston, Texas. It is a waste management and environmental services company with 50,000 employees and a network of 413 collection operations.


Earnings were inflated by $1.7 billion by increasing the depreciation time length for their property and equipment in 2002.


Parmalat was founded in 1961 in Italy by Calisto Tanzi. It is a multinational Italian dairy and food corporation with more than 15,000 employees. This leading company collapsed in 2003 with an accounting scandal of $ 20 billion which is considered as the biggest bankruptcy.


Company’s total debt was more than doubled on the balance sheet. Forgery and bankruptcy are some other allegations.

Health South Corporation

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Health South Corporation was founded by Richard M. Scrushy in 1984 in Birmingham, Alabama, USA to offer healthcare services. The company has 22,000 employees and operates 100 Inpatient Rehabilitation Hospitals. Though the company’s accounts are falsified since 1996, the scandal came into exposure in 2003.


The company’s income was overstated by as much as 4700 percent and $1.4 billion was inflated to meet the expectations of investors.

American International Group (AIG)

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Though AIG was founded in 1919 in Shanghai, China by Cornelius Vander Starr, it went to public in 1969. It is a major American Insurance Corporation based in New York City with 116,000 employees.


The company maintained lucrative payoff agreements, soliciting rigged bids for insurance contracts and inflated financial position by $2.7 billion in 2005.

Satyam Computer Services

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Satyam Computer Services was founded in 1987 in Hyderabad, India by Ramalinga Raju to offer information technology services. The company has a network in 67 countries with 53,000 employees. Very recently i.e. on 7th January, 2009 the accounting scandal came into exposure.


Inflated cash and bank balances of more than $1.5 billion (INR 7,000 crore), overstated debtors’ position of $100 million and understated liability of $250 million was arranged for him (Raju).


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