Worldcom: Final Catalyst

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Jelaskan mengenai mekanisme yang digunakan oleh Manajemen WorldCom dalam memindahkan laba dari periode waktu lain untuk meningkatkan laba tahun berjalan ? Regarding financial reporting, WorldCom used a liberal interpretation of accounting rules when preparing financial statements. In an effort to make it appear that profits were increasing, WorldCom would write down in one quarter millions of dollars in assets it acquired while, at the same time, it "included in this charge against earnings the cost of company expenses expected in the future. The result was bigger losses in the current quarter but smaller ones in future quarters, so that its profit picture would seem to be improving."

The acquisition of MCI gave WorldCom another accounting opportunity. While reducing the book value of some MCI assets by several billion dollars, the company increased the value of "good will," that is, intangible assets-a brand name, for example-by the same amount. This enabled WorldCom each year to charge a smaller amount against earnings by spreading these large expenses over decades rather than years. The net result was WorldCom's ability to cut annual expenses, acknowledge all MCI revenue and boost profits from the acquisition.

2. Mengapa Arthur Andersen mengikuti setiap mekanisme tersebut? Menurut pendapat kami terdapat kemungkinan adanya "non-independency" pada Arthur Andersen dalam melakukan audit laporan keuangan WorldCom. Perlu diketahui bahwa dua orang karyawan kunci WorldCom yaitu Scott D. Sullivan (Direktur Keuangan) dan David F. Myers (Controller) merupakan bagian dari Arthur Andersen sesaat sebelum mereka bergabung dengan WorldCom. Sehingga ada kemungkinan bahwa Arthur Andersen pada saat itu tidak melakukan kompetensi yang memadai karena merasa yakin dan segan mengenai apa yang telah dikerjakan oleh kedua karyawan kunci tersebut, karena biar bagaimanapun kedua orang tersebut merupakan "mantan" atasan auditor-auditor Arthur Andersen yang mengaudit...
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