COLUMBAN COLLEGE, INC.

College of Business and Accountancy

Bachelor of Science in Accountancy
Olongapo City

GENERAL ELECTRIC ACCOUNTING FRAUD

CASE ANALYSIS

Group 3- Members:

Eunice Anne Salazar

Marjason Tiania

Sheena Marie Tamayo

Al Jean E. Toledo

GAP Analysis

CURRENT STATE DESIRED STATE

General Electric production of Correct and Reliable Financial

false Financial Statements Statements
GAP

GAP Analysis- Statement of the Problem

General Electric mislead investors by allegedly engaging in a $38 billion accounting

fraud which amounts to 40% of GE’s market capital. The company manipulated or as they
say “cooked” its books about their insurance losses. They hid $29 billion in losses related to
its long term care insurance business and they also hid $9.1 billion in losses by using the
financial results of its subsidiary Hughes Baker. They are accused of improperly including
financial reports of Hughes Baker as a part of its own. They also failed to provide current
ratio in their annual report and also did not provide working capital schedules which
should be prepared by entities. General Electric also only has $40,000,000 dollar current
assets and $60,000,000 current liabilities, reflecting that the company is insolvent.
 COLUMBAN COLLEGE, INC.
College of Business and Accountancy
Bachelor of Science in Accountancy
Olongapo City

Cause and Effect Analysis

Has only been providing Change of accounting

Non-compliant top line revenue and
financial reporting bottom line profit and
practices intentionally omitting
various coats to hide
damaging information
formats every few
years to keep analysts
from comparing
figures over a long
period of time

Fraudulent
Financial
Statements

Accounting
malpractice
Mismanagement Accounting
Manipulation
 COLUMBAN COLLEGE, INC.
College of Business and Accountancy
Bachelor of Science in Accountancy
Olongapo City

Alternative Courses of Action

Alternative Courses of Effective Easy to Time Minimal Total

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