In class five we explored the world of accounting. We saw the many ways that companies can use accounting to provide them with positive insight. Providing the numbers, helps companies make vital decisions. Unfortunately many people abuse the system and bring a bad name to all involved.

A recent article posted on the Wall Street Journal, reveals one of the many accounting frauds in the last few years. AgFeed Industries Inc. which is a a Chinese animal-feed and hog-production company, was caught inflating revenue to unjustly improve its stock’s value. Shockingly they were getting away with falsifying their revenue “by $239 million by creating fake invoices for the sale of feed and purported sales of hogs that didn’t actually exist”. 

Selfish choices like these, affect all of the stakeholders. Not only does it bring negative media attention and a bad name  to the company, but it also affects the stock owners as they are paying for an extremely over valued item. For those that invested large amounts of money, fraud cases like this can ruin lives. Thankfully, Securities and Exchange Commission or SEC,  filled a lawsuit in which the settlement ended up being 18 million. This money provided some relief for those who were wrongfully treated throughout the whole process. It never pays to cheat, or be unethical and cases like these provide proof.