Tuesday, February 7, 2012

Nortel trial hears fraud allegations. "Cookie jar Accounting & Sudoku-Accounting" criticized.

At the ongoing trial, Crown lawyers at the fraud trial of three former Nortel Networks executives say the men created a culture of dishonesty at Nortel, the fallen telecom equipment maker, encouraging staff members to cook the books to meet bonus-related targets. Under the direction of then-CEO Frank Dunn, the use of financial reserves to bulk up flagging balance sheets was widespread at Nortel.

There was a cookie-jar approach to accounting. The lawyer likened the scheme to a game of Sudoku, in which he knew what would trigger bonuses tied to a return to profitability and manipulated numbers to get there.

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