AOL Accounting Scandal Jason Wiebe and Jacen Lougheed

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.

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, Purchase. Pro, had the largest hand (Outside of AOL itself) in this. Ernst and Young was the accounting firm to perform the external audit.

Results n n 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.

Major Players Name Title Punishment Kent D. Wakeford AOL Executive Director of Business Affairs Up to 20 years Jail time, Fine of up to $250, 000 John T. Puli AOL Vice-President of Net. Business Up to 20 years Jail time, Fine of up to $250, 000 Charles E. Johnson Jr. Purchase. Pro Chief Executive Up to 20 years Jail time, Fine of up to $250, 000 Christopher J. Benyo Purchase. Pro Senior Vice President of Marketing Up to 20 years Jail time, Fine of up to $250, 000 Joseph Michael Purchase. Pro Vice-President Kennedy and Chief Technology Officer Up to 20 years Jail time, Fine of up to $250, 000 Scott E. Wiegand Up to 20 years Jail time, Fine of up to $250, 000 Purchase. Pro Senior Vice. President and General Counsel

Works Cited n n http: //wapo. st/La 0 g 5 O (Washington Post) http: //wapo. st/Ls 9 f. On (Washington Post) http: //bit. ly/K 9 Ff. Zz (Tech. News. World. com) http: //bit. ly/Lq. Vv. Yk (Global. Ethics. org)