In the early 2000s, many large corporations such as Enron, WorldCom and HIH collapsed because of corporate greed, bad business practices and accounting irregularities. Others, such as Bristol-Myers Squibb, Xerox and Harris Scarfe were forced to restate their earnings, in some cases over a number of years, because of inflation of sales and other accounting irregularities.

Task Investigate in depth two of the above companies and determine how the irregularities were perpetrated and the reasons behind them. Also determine, to the extent possible, why these irregularities were not found by the auditors during their audits of sales revenue and receivables, and other related areas of audit. Identify the consequences for the auditors of the two companies after the irregularities became public.

There is much material publicly available on the companies mentioned in the question. In all cases, a form of creative accounting was practiced that included manipulation of earnings. You will need to obtain copies of relevant investigative reports, such as the HIH Royal Commission Report, and examine the issues that caused the corporate collapse and determine to what extent the failure was attributable to the manipulation of revenue, and the related audit issues that should have detected the fraudulent accounting taking place. The relationship of the auditors with the client and any apparent lack of independence or competence would also need to be considered. Submission You are required to undertake research on the allocated topic and present your findings in a fifteen-minute video presentation. The presentation should have an introduction, background on the selected companies, the body - this is where you will present your findings based on the task and a conclusion.