WASTE

MANAGEMENT
SCANDAL
Waste Management Scandal
From : Group Claude Obelia

1. SHAZWANA BINTI SHAMSUL KAMAR (UDE210119)

2. TENGKU DANIAL AFOZE BIN TENGKU NAZWAN NAIM (UDE210128)

3. YUS ALYA SOFIA BINTI YUSYAIRI (UDE210138)

4. LAU CHEE CHENG (UDE210145)

5. NUR ARIKA IMAN BINTI MAZLIPHA (UDE210178)

6. RAMYAA A/P BALU (UDE210186)

OUR TEAM

SHAZWANA BINTI TENGKU DANIAL AFOZE BIN YUS ALYA SOFIA BINTI
SHAMSUL KAMAR TENGKU NAZWAN NAIM YUSYAIRI

UDE210119 UDE210128 UDE210138

OUR TEAM

NUR ARIKA IMAN BINTI

LAU CHEE CHENG MUZLIPHA RAMYAA A/P BALU

UDE210145 UDE210178 UDE210186

 01
BACKGROUND
TABLE OF CONTENTS Nature of fraud, history
and how it is discovered

EFFECTS
Effects on the company
after the scandals
02
COMPONENTS OF INTERNAL CONTROL
Internal controls to avoid
03
the fraud case

STATUS QUO
Waste Management
04
current situation

CONCLUSION
05
BACKGROUND
• Founded by Larry Beck in 1894
• Providing various of services
• Became the largest hauler in
America in 1980
TIMELINE OF THE
SCANDAL
1965

Solid Waste Disposal

Act approved 1968

Arthur Andersen 1971

brought in as
auditors

Waste Management
goes listed
TIMELINE OF THE
SCANDAL 1998 $1.7 BILLION
OVERSTATEMENT
OF EARNINGS
The fraudulent REVEALED
1996 accounting practices
was discovered by
the new CEO

The CEO, Dean

1991 - 1998 Buntrock retired

Financial statement
fraud arising within
the company
Effects of Waste Management after the
Scandal
TABLE 1

Waste Management Stock Prices – 1992 through 1999

 DEAN L. BUNTROCK
Waste Management founder ,former chairman
of the board directors and former CEO

Table 2 : Fraudulent Executive Profits

EXECUTIVE Estimated Gains from the Fraud
DEAN L. BUNTROCK Over $16.9 million
PHILLIP B. ROONEY Over $9.2 million
JAMES E. KOENIG Over $900,000
THOMAS C. HAU Over $600,000
HERBERT GETZ Over $450,000
BRUCE D. TOBECKSON Over $400,000
 The corporation made a $1.7 billion overstatement.
 The shareholder’s loss approximately $6 billion..
 The business was ordered to pay them a total of $467 million
 Arthur Anderson, an audit firm company, was fined $7 million for
conspiracy or criminal incompetence.
 The six highest executives were fined $31 million and were also
forbidden from serving as officers or directors of any public corporation.
3 Components of Internal Controls

Control Environment Monitoring

1. Fraud prevention should be part of 2. Ethical management 3. Monitor vacation balance

employee training
 Companies should  Employees should be
 Aware of fraud warning signs
collaborate with ACFE circulated through
 Having a process that can help
(Association of Certified multiple jobs within a
employees feels more ease in
Fraud Examiners) company
alerting their managers
 ACFE provider if anti-fraud  The less chances for fraud
training and education detection in company
3 Components of Internal Controls
Control Activities
1. Using external auditor
 Minimize the management
having excessive adjustment
 Helps when employees are
discouraged from intentionally
providing inaccurate financial
information
Management Risk
Assessment Process
2. Risk Assesment 3. Control Activities
 Assist guarantee risk
 Aware of high-risk areas
responses are carry out
 Choosing how to respond
properly
to the threats
 Assist or avoid the risk
chapter objectives not
being met.
Present Situation of Waste Management

 Waste Management truly embarked since their scandal

 Waste Management now promotes their diversity and
compliance of ethics proudly
 These are panels of equity and leadership that promotes
diversity in Waste Management
 With the world evolving and expanding, Waste Management
takes into account that people from different backgrounds and
believes will be equally respected and appreciated
 Present Situation of Waste Management
 Waste Management has created a goal for 2025 quoting Inclusion, Equity &
Diversity will be the central pillar and focus in WM’s culture. In addition to
growing our focus on LGBTQ, Veterans and Disabled we are setting new goals in
areas such as Female Representation and Ethnic & Racial Diversity.

 Compared to where WM was, now in the present with the help o the
advancement of technology, they are able to showcase a website that is very
helpful and informative.
 Present Situation of Waste Management

 The picture beside represents to be the

front page of the website

 WM has a virtual assistant available for any inquiries or

questions that will be asked by customers that is available for
24 hours.
Present Situation of Waste Management

 WM provides a pick up service that requires customer to fill in

their details and a pick up will be scheduled
 This service truly shines and proves how much WM has evolved
throughout the years.
Conclusion

 Accounting fraud can quite possibly damage and bring down a company.

 The result of this scandal has been able to teach other companies to not break the law.

 An auditor should be responsible to abide by the rules to ensure the audit of a company goes well.

 the auditor should not be held responsible for not being able to detect fraud
 THANKS FOR WATCHING
Link for video presentation :
https://drive.google.com/file/d/1AC_g7aUgox_DoU-Ef6_Bl7v1dB9rh5jy/view?usp=sharing