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Suppose auditors audit a company based on what the higher management of that company says. Why do we still need auditors? This obvious accounting fraud will be discovered immediately if another audit firm does the audit. Arthur Andersen claims to be one of the world’s top audit firms, yet they did not discover the fraud!?

Many people believed that Arthur Andersen knew what was going on. They are in cahoots with the higher management of Enron and many other companies. Although there is no evidence pointing to this, Arthur Andersen was slapped with a penalty of 500,000 USD.

500,000 USD is nothing to a firm like Arthur Andersen. They charge more than this figure for an audit. After all, they are one of the world’s top auditors and have many regular customers in the US.

The heaviest penalty is Arthur Andersen is not allowed to operate in the US for five years. Arthur Andersen had no choice but to accept the judgment, and they surrendered their licenses in the US. What’s the point of keeping the license if they are not allowed to operate?

Arthur Andersen started to cut their employees in their offices all over the US. Their staff was cut from almost 30,000 to less than 3,000. They had nearly 1,300 regular customers formerly, and all of them canceled their contracts with Arthur Andersen.

After Enron’s scandal was exposed, people became skeptical of Arthur Andersen. Now, WorldCom was committing accounting fraud, and who dares to use Arthur Andersen again?

Even if Arthur Andersen was not forced to stop its auditing practice, their reputation is already gone. But now, it is only slightly worse, as people all over the world know about this.

To cover up their malpractice, Arthur Andersen had destroyed the documents and PC files of their audit on Enron and WorldCom. All these documents are critical, and this is an obstruction of justice. They only can blame themselves for all these.

WorldCom is finished. The stock market had shown signs of recovery this year, but it started to dive again. WorldCom is going to be bankrupt, and the companies that have dealings with them are also affected.

Nasdaq, Time Warner, and many Government departments are WorldCom clients.

WorldCom’s debtors cannot recover their money anymore.

This resulted in all the banks’ and financial institutions’ share prices falling and caused a chain reaction.

Of course, other than the investors, Bush is also feeling unfortunate.

Damn! Bush had just signed many trade agreements with many countries to improve the US economy. The stock market was finally stabilized. But when he was visiting other countries, another scandal surfaced!

Regardless it is Enron or WorldCom, they are loyal supporters of Clinton. Why should I clean up this mess for you all?

Many states had used the pension funds to invest in Enron and WorldCom. Even if they had not invested in these two companies and invested in other companies, they are also affected by the market crash.

The highest losses for the state’s pension funds are a few hundred million USD, and it has a big impact on Bush.

Bush is determined to deal with WorldCom, but there’s nothing he can do as WorldCom is as good as dead. So, Bush targeted the other clients of Arthur Andersen.

If Bush can prove the economic boom previously are all fake and based on lies, he will gain more supporters.

Bush ordered the SEC to investigate Arthur Andersen’s clients, and they found several problems.

Of course, the problems are all relating to accounting. Several companies in Fortune 500, like General Electric, etc., were among the companies that have problems. To Feng Yu’s surprise, Microsoft was also included!

There are many more companies outside of Fortune Global 500 that have accounting issues.

After this news was reported, Microsoft and those companies’ share prices tumble and caused the US, Asia, and Europe stock markets to crash.

The US stock market plunges the most, followed by Europe and Asia. Asia markets fell by an average of 3%, Europe by 5%, and the US stock markets fell more than 8%/

This only for one day, and the downward trend will last for some time.

Bush is speechless. He felt he had shot himself in his foot. He had only wanted to push the blame to the former President, Clinton, for the economic downturn. But now, he had exposed more scandals involving banks, financial institutions, market analysts, etc.

The US needs something to stimulate its economic recovery. But the series of accounting scandals gave it’s economy a heavy blow.

The investors had lost confidence in the US market. Without the investors’ investments, how can the stock market recover? The US economy will not recover if this carries on. People are even dumping US bonds.

The US market had entered its most serious bear market!

The European and Asia stock markets fell for a few days. They stabilized, as investors had used their funds withdrawn from the US markets to invest in the European and Asia stock markets.

Bush’s orders had caused the US markets to crash!

People say the US companies’ CEO, audit firms, and Securities analysts cannot be trusted.

Most of the CEOs of those companies with accounting issues also have problems. Many of these companies were doing well, but they still want to fabricate their accounts. For example, Microsoft.

To save the market, Bush’s administration implemented a new policy. The CEO and CFO of companies worth more than 1 billion USD must issue a written guarantee that the company’s latest financial report is accurate. If irregularities are found in the reports, the CEO and CFO will be charged with fraud!

Wall Street supported this policy, and after it was implemented, the Dow Jones index raised by over 300 points on the same day.

Feng Yu is not concerned about all these as he is meeting the Chairman of Advanced Micro Devices (AMD).