Verizon Wireless

Topics: Verizon Communications, MCI Inc., Accounting scandals Pages: 4 (1280 words) Published: May 9, 2011
Devon Daniel

Verizon stars with WorldCom in 1983 when Murray Waldron and William Rector came together to sketch out a plan create a long-distance telephone service. Long Distance Discount service, became their new company that began operating as a long-distance reseller in 1984. The new company grew quickly in the next fifteen years, over time it change to WorldCom. The company became one of the largest telecommunications corporations in the world. They also became the largest bankruptcy filing in U.S. history and another big name on the list of disgraced by the accounting scandals. They recorded $ 3.8 billion in capital expenditures profit in 2001and the first quarter of 2002. They continued to buy company stock when they wasn’t supposed to, which led to the unawareness of fraud that by doing this led to the stock’s price. In 1999, internal investigations discovered questionable accounting practices. CEO Ebber received a controversial $408 million loan to secure by the company stock. WorldCom signed a credit agreement with multiply banks to borrow 2.65 billion that they will repay back within a year, in July 2001. The Securities and Exchange Commission made WorldCom to detail the fact s of underlying the events that happen in June 2002. A meeting was held between the board’s audit committee and Anderson; he assessed WorldCom’s accounting practices to determine they had control to prevent material errors in its financial statements. WorldCom was taking expenses that should have directly attributed to the balance sheet and attribute them to specific assets. They making look like they had no decrease in asset, no decrease in net income, and was hiding the expense. WorldCom in end up going in debt for 7.7 billion, that why they filed for chapter 11bankruptcy protection on July 21, 2002. The firm listed $107 billion in assists and $41 billion in debt, in the bankruptcy filing. In July 2005, CEO Ebbers was sentenced to twenty-five years in a federal...
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