Accounting scandals occur when companies manipulate their financial statements to present a misleading picture of their financial health. This can involve practices like inflating revenues, hiding debts, or misrepresenting expenses. Such actions can lead to significant legal consequences and loss of investor trust. Notable examples of accounting scandals include the cases of Enron and WorldCom. In these instances, executives engaged in fraudulent activities that ultimately led to the companies' bankruptcies. These scandals prompted regulatory changes, including the implementation of the Sarbanes-Oxley Act, aimed at improving corporate governance and financial transparency.