accounting scandal

An accounting scandal occurs when a company deliberately misrepresents its financial status, often to inflate revenue or hide debt, misleading investors and regulators. This can involve fraudulent practices such as falsifying records or manipulating financial statements. Such scandals erode trust, lead to legal consequences, and can cause significant financial losses. Notable examples include Enron and WorldCom, where executives engaged in unethical practices to portray a healthier company than reality. The fallout typically results in stricter regulations and a push for greater transparency in corporate accounting.