Waste Management Case Study
Waste Management Case Study
April 24, 2010
Introduction: Ace Scavenger Service began its journey as a small, family owned trash hauling business in 1894. The family business was passed to Dean Buntrock in 1956. Buntrock had the foresight to begin consolidating small trash companies into one large company. He started with the merger of his firm with two other smaller firms in 1968 and created Waste Management, Inc. In 1971, Waste Management, Inc. had its initial public offering and used those proceeds, and some questionable business practices, to take over their competitors. It was a great time to be in the garbage business as throwaway items and containers began to become more and more common and the trash business was also beginning to deal with environmental issues, such as chemical and toxic waste treatment. During their major growth period during the 1970’s, Waste Management, Inc. hired Arthur Andersen to design and install a centralized computer network that would provide them with detailed information about their nationwide operations. What went wrong is a story of improper accounting practices and the issuance of unqualified financial statements by auditors who knew they were fraudulent, but chose to issue them anyway.
Management Style: The business model of Dean Buntrock and his contemporaries was to use an aggressive management style and purchase smaller companies through illegal trade practices, such as price fixing, bid rigging, bribery, illegal campaign contributions and physical intimidation when necessary. Buntrock and the other heads of Waste Management, Inc. preferred to do whatever they felt was necessary to accomplish an objective and worry about the consequences, if any, when they happened. Waste Management often escaped blame for illegal acts by claiming that the various heads of smaller acquired companies performed the illegal acts without the knowledge or consent of upper management. This style of management was reflected by
April 24, 2010
Introduction: Ace Scavenger Service began its journey as a small, family owned trash hauling business in 1894. The family business was passed to Dean Buntrock in 1956. Buntrock had the foresight to begin consolidating small trash companies into one large company. He started with the merger of his firm with two other smaller firms in 1968 and created Waste Management, Inc. In 1971, Waste Management, Inc. had its initial public offering and used those proceeds, and some questionable business practices, to take over their competitors. It was a great time to be in the garbage business as throwaway items and containers began to become more and more common and the trash business was also beginning to deal with environmental issues, such as chemical and toxic waste treatment. During their major growth period during the 1970’s, Waste Management, Inc. hired Arthur Andersen to design and install a centralized computer network that would provide them with detailed information about their nationwide operations. What went wrong is a story of improper accounting practices and the issuance of unqualified financial statements by auditors who knew they were fraudulent, but chose to issue them anyway.
Management Style: The business model of Dean Buntrock and his contemporaries was to use an aggressive management style and purchase smaller companies through illegal trade practices, such as price fixing, bid rigging, bribery, illegal campaign contributions and physical intimidation when necessary. Buntrock and the other heads of Waste Management, Inc. preferred to do whatever they felt was necessary to accomplish an objective and worry about the consequences, if any, when they happened. Waste Management often escaped blame for illegal acts by claiming that the various heads of smaller acquired companies performed the illegal acts without the knowledge or consent of upper management. This style of management was reflected by
References: American Institute of Certified Public Accountants. AU Section 150 - Generally Accepted Auditing Standards. Retrieved April 24, 2010, from, http://www.aicpa.org/download/members/div/auditstd/au-00150.pdf Business World. Capital View. July 22, 2009 by Mercedes B. Suleik. Retrieved April 24, 2010, from ProQuest Newsstand. (Document ID: 1799107131) Clikeman, Paul M. (2009). Waste Management. In Called to account fourteen financial frauds that shaped the American accounting profession (pp. 204-212). New York: Routledge. Daily Herald.Mike Comerford Daily Herald Business Writer. Daily Herald August 30, 2005. ProQuest Newsstand. Siegel, Joel G, Levine, Marc H., Qureshi, Anique A., Shim, Jae K. (2010). Balance Sheet Reporting and Disclosures: Assets. In GAAP 2010 Handbook of Policies and Procedures (pp. 3.74 – 3.80). U.S. Securities and Exchange Commission. Waste management Founder, Five Other Former Top Officers Sued for Massive Fraud. 2002-44. http://www.sec.gov/news/headlines/wastemgmt6.htm [pic][pic][pic][pic][pic][pic]