After the WorldCom scandal was exposed, even though Andersen claimed that the work of auditors relied on the honesty and integrity of management, no one could accept it.
Why should we audit companies if they all depend on the honesty and integrity of management? Such an obvious accounting problem was discovered immediately after changing the auditing company. Andacinda, which claims to be the world's top auditing company, didn't discover it
More people are willing to believe that Anxinda is not unaware, but is colluding with the management of WorldCom, Enron and other companies. Although there is no evidence yet, Anxinda has been labeled as obstructing justice and has made fined half a million dollars.
A mere US$500,000 is obviously a drop in the bucket for a top auditing company like Anxinda. Their annual income from any audit is more than this. After all, they are the top accounting firm in the world. In North America alone, there are so many What about regular customers
The most important thing is the second penalty. Anxinda will not be allowed to engage in related business in the United States for five years. As a result, Anxinda had to "knowingly" announce that they would give up all auditing business in the United States and officially withdraw from the auditing industry. If you have no customers for five years, why keep this business if you don’t quit
Then Anxinda's offices in the United States began to be closed down, and the company began to lay off employees on a large scale. The number of employees went from nearly 30,000 to less than 3,000. All nearly 1,300 previous regular clients have terminated their contracts and switched to other accounting firms.
After the Enron incident broke out, they had a grudge against An Xinda. Now that something has happened to WorldCom again, everyone is saying that the companies audited by Anxinda have problems with their accounts. Who dares to use Anxinda
In fact, even if Anxinda had not been fined and not allowed to engage in related businesses, Anxinda would have fallen from the top in the world to mediocre, but it is just a bit worse now. From international fame to notoriety.
In order to cover up their audit problems, Anxin destroyed some of the audit materials on Enron and WorldCom, whether they were paper reports or electronic documents, and they were all very important. Obviously, this is indeed obstruction of justice, and they are themselves to blame for their current plight.
WorldCom is finished. The stock price had been rebounding this year, but now it has started to fall again. Because WorldCom is about to go bankrupt, the stock prices of companies that have a lot of business dealings with WorldCom have fallen one after another.
For example, Nasdaq is one of WorldCom's major customers. There are also Time Warner, many political departments in the United States, etc.
There are also so many creditors of WorldCom, and the debts they lent to WorldCom will never be recovered.
This also caused bank stocks to start to fall, and the stocks of investment institutions to fall, which then triggered a chain reaction. The U.S. stock market was once again unlucky.
Of course, in addition to the unlucky investors, Xiaobu Shi also felt extremely unlucky.
Damn it, he just turned the economy around a bit, and relied on American companies to sign so many contracts with foreign countries to stabilize the stock market. But in the end, he just went abroad for a visit, and something happened again!
What about Enron or WorldCom? They were both his competitors and loyal supporters of Clinton at the beginning. They cooperated with you to defraud money and use it, and now you want me to take the blame
Pensions in many states are invested in the stocks of companies such as Enron and WorldCom. Even if they don't invest in these two companies and invest in other companies, aren't they still losing money because of the stock market crash
State pensions have lost hundreds of millions of dollars at most, and tens of millions of dollars at least. These are all major events that can shake up Xiaobu's position.
Xiaobu Shi wanted to take care of Shitong, but Shitong had nothing to deal with and was doomed, so Xiaobu Shi set his sights on Anxinda's other customers.
If it can be proven that the prosperity of the previous period was false prosperity, it may be able to improve his approval rating.
After Xiaobu conducted an in-depth investigation, some problems were indeed found among Anxinda's customers.
Of course, all are financial issues, and include several Fortune 500 companies. For example, there are more than a dozen companies such as Tektronix International, Kaimat, Tongyong Electric, and Shiler Company. What Feng Yu didn't expect was that Microsoft was also included!
As for those outside the top 500 in the world, there is also one.
After this news broke, not to mention the stock prices of Microsoft and other companies began to fall. The entire US stock market, including Asian and European stock markets, fell across the board that day.
Of course, the United States has suffered the most serious decline, followed by Europe and Asia. The average decline in Asia is about 3%, in Europe it is about 5%, and in the United States, it exceeds 8%.
This is only one day, and it looks like this decline will continue for some time.
Xiao Bu Shi was dumbfounded. He felt like he had shot himself in the foot. Originally, he just wanted to shift the public's accusations against him onto his predecessor, Colinton. But there are too many scandals breaking out now, including bank fraud, securities analysts deliberately misleading consumers, etc., all of which have been reported.
At this time, the United States is in need of new impetus to promote their economic recovery. The continuous exposure of corporate financial scandals, including scandals at banks and securities companies, has a very heavy blow to the United States' economic recovery.
Many investors have also lost confidence in the entire U.S. investment market. Without these funds, it will be difficult for the stock market to rebound. How can the economy recover? Including treasury bonds, they were sold off in large quantities.
The U.S. stock market has fallen into the most serious bear market!
On the other hand, the stock markets in Europe and Asia stabilized after falling for a few days. All the funds withdrawn from the United States were invested in these places.
According to Xiao Bu Shi’s survey, the most unlucky country is the United States!
Now people say that American company CEOs cannot be trusted, accounting firms cannot be trusted, and securities analysts cannot be trusted. The only one who can be trusted is perhaps God.
For companies with financial problems, most of the CEOs also have problems. Many people say that some companies, such as Microsoft, are obviously making profits but still falsifying their profits. This is because American society worships CEOs and individual heroism. This is very undesirable and must be rescued.
In order to save the market, Xiaobu introduced a policy that requires the CEOs and CFOs (chief financial officers) of all companies with revenue of more than one billion US dollars last year to guarantee in writing that the company's latest financial statements are correct. In this way, if the financial statements are still wrong, then they will face civil lawsuits for fraud, or even criminal lawsuits from the government!
Wall Street supports this kind of approach. After this policy was introduced, the Dow Jones Index rose by more than 300 points that day.
Feng Yu didn't care much about these. He was meeting with the chairman of AMD Semiconductor with Ralph.
… (To be continued.)