Accounting scandals, or corporate accounting scandals are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates.

In public companies, this type of "creative accounting" can amount to fraud and investigations are typically launched by government oversight agencies, such as the Securities and Exchange Commission (SEC) in the United States.

In 2002, a wave of separate but often related accounting scandals became known to the public in the U.S. All of the leading public accounting firms—Arthur Andersen, Deloitte & Touche, Ernst & Young, KPMG, PricewaterhouseCoopers— and others have admitted to or have been charged with negligence in the execution of their dutyFact: date=March 2007 as auditors to identify and prevent the publication of falsified financial reports by their corporate clients which had the effect of giving a misleading impression of their client companies' financial status.Fact: date=March 2007 In several cases, the monetary amounts of the fraud involved are in the billions of USD.

Big Four major audit firms

(Audit firms are listed, followed by select clients ensnarled by accounting scandals)

• Deloitte & Touche: Adelphia, AES, Duke Energy, El Paso, Merrill Lynch, Reliant Energy, Rite Aid, Parmalat
• Ernst & Young: AOL Time Warner, Dollar General, PNC Bank, Cendant, HealthSouth
• KPMG: Citigroup, Computer Associates, ImClone, Lernout and Hauspie, New Century, Peregrine, Xerox, Siemens AG, Banco Nacional S.A. (Brazil), BMW Group
• PricewaterhouseCoopers: Bristol Myers, HPL, JP Morgan Chase, Kmart, Lucent, MicroStrategy, Network Associates, NKFS, Tyco

Predecessor and other U.S. audit firms

• Arthur Andersen: CMS, Cornell, Dynegy, Enron, Global Crossing, Halliburton, Liberate Technologies, Martha Stewart Living Omnimedia, Merck, Peregrine, Qwest, Sunbeam Products, Waste Management, Inc., WorldCom. Arthur Andersen was a former major audit firm that began to unwind its operations in 2002 after being indicted for obstruction of justice for shredding documents related to its Enron audit.
• David Duncan
• Coopers & Lybrand LLP: Network Associates, Phar-Mor. Former major audit firms Coopers & Lybrand and Price Waterhouse merged in 1998 to become PricewaterhouseCoopers (see above).
• Gutierrez & Co.: Vivendi
• Grant Thornton: Parmalat

Notable Accounting Scandals (Year First Reported -- Principal Participants)

• Nugan Hand Bank (1980)
• ZZZZ Best (1986)
• MiniScribe (1989)
• Polly Peck (1990)
• Bank of Credit and Commerce International (1991)
• Phar-Mor (1992)
• Q. T. Wiles
• Bio Clinic (1994 to 1995)
• Sunrise Medical (1994 to 1995)
• Cendant (1998)
• Microstrategy (2000 - Michael Saylor, Sanju Bansal, Mark Lynch)
• Xerox (2000)
• Unify Corporation (2000)
• One.Tel (2001) (Australia)
• Enron (2001 - Jeffrey Skilling, Kenneth Lay, Andrew Fastow)