Harness accounting software to avoid scandals
October 28, 2014

For accounting firms, reputation is an integral component of their ability to operate successfully. The minute scandals break loose or fraud is uncovered within organizations, clientele could panic and abandon all association, taking their business with them. 

Accounting associations need to take every measure possible to ensure the integrity of their work. If they don't, it could lead to their failure. Thankfully, advancements in technology like finance software have given accountants tools they can use to guarantee accuracy in calculations and maintain records with precision. Many organizations have been brought to ruin from an accounting error or a criminal hiding in their midst. Accountants need to seize these advantages if they want to safeguard their honor and that of the firm.

Whether it's an individual or an entire department, it can be very easy for someone to slightly alter a balance sheet or casually forget to list certain debts, especially if a firm is using outdated hardware and programs. The costs of such actions could result in innumerable penalties and fines, as well as even hard prison time for anyone involved.

Here are a few of the most famous financial scandals to grip the world that could have been prevented with vigilance and some of the tools used in the industry today:

  • The Waste Management Scandal - This company managed to report $1.7 billion in fake earnings by altering the value of its property and equipment over time on its balance sheets in 1998, according to an infographic by Accounting-Degrees.org. The discovery was only made when a new CEO was brought in to try and turn the company around and took a look at the organization's books.
  • The Enron Scandal - Up until the controversy caused by deceitful actions, Enron was one of the most successful organizations in the United States and was ranked the country's "most innovative company" by Fortune Magazine for six years in a row. However, by hiding large debt on its balance sheets, Enron lost billions of dollars of shareholders' money and even the pensions for thousands of employees, asserted Business Pundit. When stock prices weren't matching up with the numbers appearing on financial records, people started growing suspicious of the integrity of Enron's books. Everything was confirmed when a whistle blower named Sherron Watkins exposed the scandal.
Nexus: G-WEBCD2