Parmalat was a highly successful food company until it entered bankruptcy protection in 2003. Investigations revealed that, for years the company had been using false accounting and complicated financial systems to create a picture of financial health, misleading investors and analysts alike.
In late 2003, when news broke out that Parmalat, one of the biggest and most successful companies of Italy, had used fraudulent accounting for well over a decade and a half to hide its real financial position, people were only mildly shocked. After all, accounting scandals had almost become a trend of the times. It all started with Enron, the American energy giant which broke down in 2001, following the revelations that the company's huge success in a very short time had its roots in posting inflated profits and using complicated financial transactions to hide debts. The Enron fiasco led to lifting the veil on another American company, WorldCom, which eventually acquired the dubious distinction of having the biggest bankruptcy ever witnessed in business. While US was still reeling with the shock of the bankruptcy of two of its bigger companies, Europe did not lag behind. So while the US got Enron, WorldCom and several other big names, Europe responded with Ahold and Vivendi. Parmalat, though a big blow to Italy, was just another company added to the already long list of fraudulent companies.
Some analysts commented that accounting scandals were to the 2000s as environmentalism and sexual discrimination were to the 1990s. In other words, they were the most discussed and analyzed of all corporate activities. So common had they become that some business schools even introduced ethics courses for their accountancy students.
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