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Halliburton Accounting Scandal
Transcript of Halliburton Accounting Scandal
What is Halliburton?
The Judicial Watch, representing shareholders filed a suit against Former Vice President Dick Cheney, 13 other directors, Halliburton Corp and Arthur Andersen, its accounting firm.
Based in Houston and Dubai, Halliburton is one of the largest oil companies in the world.
The company owns many subsidiaries, branches and units.
Making it a key player in the world economy.
Due to its many subsidiaries Halliburton's operations span the globe, employing over 100 000 people.
Halliburton's well known among the top oil companies in the world.
The Halliburton Accounting Scandal
Halliburton Energy Services
Richard B. Cheney
David J. Lesar
Ray L. Hunt
Robert L. Crandall
Charles J. Dibona
Lawrence S. Eagleburger
William R. Howell
James Landis Martin
Jay A. Precourt
Cecil J. Silas
Douglas L. Foshee
Jerry H. Blurton
Robert Charles Muchmore, JR.
Arthur Andersen, LLP
Terrence Edward Hatchett
Halliburton fails to notify investors and analyzers about
A number of schemes were built to anchor the health of the company's financial position, misleading people.
The scheme turns out to be a practice Halliburton uses to deceive the public.
Where the Case Stands today?
In 2002, Halliburton paid 6 million dollars to the plaintiffs who had requested 7.5 million. Halliburton mixed with many of its harmful schemes received poor public relations and had lost many loyal and trustworthy customers.
The Accounting Issues/GAAPs Involved
Many GAAPs were violated by Halliburton, such as:
The Objectivity Principle
The Consistency Principle
Convention of Conservatism
Revenue Recognition Principle
The Matching Principle
Full Disclosure Principle
The suit charges Halliburton with improper accounting practices and misguiding press releases effecting the overstated shares, meaning shareholder losses.
The lawsuit alleges the company inflated its revenue by $445 million USD through 1999 and 2001.
How They got Caught?
The US Securities and Exchange Commission (SEC) performed a formal investigation into Halliburton and uncovered the truth. Most companies are routinely audited throughout their fiscal period to ensure proper and trustworthy documentation and results.