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AOL Accounting Scandal

AOL Accounting Scandal. Jason Wiebe and Jacen Lougheed. What happened.

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AOL Accounting Scandal

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  1. AOL Accounting Scandal Jason WiebeandJacen Lougheed

  2. What happened In 2005, Time Warner, AOL’s “Parent Company”, Reached a settlement with the SEC (Securities and Exchange Commission) for $510 million for their falsifying of financial statements from 2000 to 2002. Over this time, AOL had overstated their advertising revenue by over $500 million.

  3. Details From the last quarter of 2000 to 2002, AOL had been paying sites that bought advertising space, creating “Round-trip” transactions, essentially paying themselves for advertising space. In particular, one company, PurchasePro, had the largest hand (Outside of AOL itself) in this. Ernst and Young was the accounting firm to perform the external audit.

  4. Results • Due to the investigation carried out by the SEC, Time Warner, AOL, and many of the executives involved have been individually charged for their involvement in the scandal. • AOL and Time Warner’s reputations dropped drastically, with AOL never entirely recovering.

  5. Major Players

  6. Works Cited • http://wapo.st/La0g5O (Washington Post) • http://wapo.st/Ls9fOn (Washington Post) • http://bit.ly/K9FfZz (TechNewsWorld.com) • http://bit.ly/LqVvYk (GlobalEthics.org)

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