Summarize the events of a recent accounting scandal

Summarize the events of a recent accounting scandal. Identify how the illegal or unethical act was detected and describe the punishments that resulted (fines, prison terms, etc.). Consider what could havebeen done to detect this act earlier orto prevent itfrom happening in the first place. Select a different example than those listed in previous posts.Qwest Communications International, Inc Qwest Communications was one of the largest telecommunications companies in the United States. According to the SEC (Securities and Exchange Commissions), they suspectedthat, “between 1999 and 2002, Qwest fraudulently recognized over $3.8 billion in revenue and excluded $231 million in expenses as part of a multi-faceted fraudulent scheme to meet optimistic and unsupportable revenue and earnings projections” (SEC, 2004, para.1). On October 21, 2004, the SEC charged the company. The illegal and unethical acts committed by Qwest wasdetected because the SEC began to investigate the companies accounting practices. From 1999-2001, Qwest’s revenue inflated by 2.2 billion dollars, which caused their stock prices to increase. This inflation also continued over into 2002. This is when the SEC began to look into Qwest’s accounting practices. The SECsentenced several executives for insider trading activities and also sentenced the CEO, Joseph Nacchio, to six years of prison. Furthermore, Qwest had to pay a civil penalty of $250 million and $1 disgorgement (SEC, 2004, para. 2).In order for this act not to happen in the first place there should have been a person held responsible for auditing the company’s finical practices, other than the CEO and other top executives. Qwest needed an internal controls structure. In fact, this is what the SEC demanded that Qwest do. The SEC required Qwest to permanently maintain a COO (Chief Compliance Officer) to report to a committee of outside directors; and is responsible for ensuring the company conducts its business in compliance with the federal securities laws (SEC, 2004, para. 3).