Overview of the Caterpillar Tax Fraud Scandal PDF

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Summary

However, a lawsuit against Caterpillar Inc. for inadequate tax disclosure had greatly impacted the company from the time period of 2013 to 2017....

Description

An accounting fraud is the manipulation of financial statements in order to benefit the business financially or to create a false appearance of financial health. In the situation of Caterpillar Inc. (CAT) - a manufacturer of heavy construction and mining equipment, diesel-electric locomotives, diesel and natural gas engines, and industrial gas turbines - the payment of federal income taxes on their earnings was avoided to boost the company’s financial status, saving the company billions of dollars and keeping its stock price high. CAT, having more than 500 locations worldwide - including the Americas, Asia Pacific, Europe, Africa, and the Middle East - is vast in size and in economic standpoint, with sales and revenues of $53.9 billion in the year 2019 (Caterpillar, 2020). However, a lawsuit against Caterpillar Inc. for inadequate tax disclosure had greatly impacted the company from the time period of 2013 to 2017....