"Kasus Worldcom" Essays and Research Papers

Kasus Worldcom

WorldCom Case Study Update 20061 by Edward J. Romar, University of Massachusetts-Boston, and Martin Calkins, University of Massachusetts-Boston Read the original case. In December 2005, two years after this case was written, the telecommunications industry consolidated further. Verizon Communications acquired MCI/WorldCom and SBC Communications acquired AT&T Corporation, which had been in business since the 19th Century. The acquisition of MCI/WorldCom was the direct result of the behavior...

2005, Accounting scandals, Bernard Ebbers 1995  Words | 5  Pages

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World Com

about WorldCom. Briefly explain how WorldCom did not honor their statement. WorldCom - "our objective is to be the most profitable , single source provider of communications services to customers around the world. Unstated Mission - Increase shareholder value." WorldCom's mission statement neatly encapsulated aspirations and strategies to be the leading facilities-based provider of end-to-end Telecommunications and Internet services to business customers globally".(WorldCom.com) WorldCom was the...

Accounting scandals, Bernard Ebbers, Business ethics 1454  Words | 5  Pages

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Worldcom

7/22/13 WorldCom Search » Ethics Home Page About the Center Focus Areas Bioethics Business Ethics Campus Ethics Character Education Government Ethics Internet Ethics More... Publications Ethics Articles Ethics Cases Ethical Decision Making Videos Ethics Blogs Podcasts E-letter/Subscribe Contact Us Site Index WorldCom1 By Dennis Moberg (Santa Clara University) and Edward Romar (University of MassachusettsBoston) An update for this case is available. 2002 saw an unprecedented number of...

Bernard Ebbers, Citigroup, MCI Communications 3836  Words | 11  Pages

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Worldcom Scandal

WorldCom Scandal A summary of WorldCom fraud would include having to describe the greed that would eventually destroy one of the largest communications companies in the United States and world. A humble motel owner, Bernard Ebbers took a small long distance company in 1983 and turned it into one of the most successful businesses in the country. It was not so much the business operations that caused the company to grow but the aggressive acquisitions that made the company grow. In its day, CEO Bernard...

Bernard Ebbers, Corporate governance, Fraud 464  Words | 2  Pages

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Worldcom Scandal

WorldCom Scandal Formerly known as WorldCom, now known as MCI, this U.S.-based telecommunications company was at one time the second-largest long distance phone company in the U.S. Today, it is perhaps best known for a massive accounting scandal that led to the company filing for bankruptcy protection in 2002. In 1998, the telecommunications industry began to slow down and WorldCom's stock was declining. CEO Bernard Ebbers came under increasing pressure from banks to cover margin calls on...

Auditing, Bankruptcy, Bernard Ebbers 582  Words | 2  Pages

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Business Ethics and Worldcom

fraudulent accounting practices that led to the collapse of Worldcom. Other objectives of this paper will be to demonstrate how these activities were able to go undetected. Also, what motives drove the individuals involved to commit these acts. And finally the ethical accounting issues involved. Worldcom got its start as a small discount long distance provider in Mississippi. Founded by Bernard Ebbers and a number of others the idea for Worldcom was simple, buy long distance services from larger companies...

Accounting scandals, Business ethics, Enron 3460  Words | 9  Pages

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Should Worldcom Ceo Bernard Ebbers' Been Sentenced to 25 Years in Prison?

Introduction The WorldCom fraud that came to light in 2002 was an example of many things that went wrong within the organization. Unethical conduct by its senior leadership beginning with Chief Executive Officer (CEO) Bernard Ebbers was certainly at the forefront of these problems. The question is should a CEO like Ebbers have been sentenced to prison for his liability in the WorldCom scandal? My answer is yes, he should’ve gone to prison as well as other CEOs who engage in...

Chief executive officer, Corporate governance, Ethics 1893  Words | 10  Pages

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Logic

following case studies: • Case Study: Arthur Andersen's Troubles, pg. 114 • Case Study: WorldCom: The Final Catalyst, pg. 121 Ethics Case: WorldCom: The Final Catalyst This case presents, with additional information, the WorldCom saga included in Chapter 2. Questions specific to WorldCom activities are located at the end of the case. Worldcom Lights the Fire WorldCom, Inc., the second largest U.S. telecommunications giant and almost 70 percent larger than Enron in assets, announced...

Bernard Ebbers, Expense, Fraud 3409  Words | 10  Pages

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Cynthia Cooper: Journey of a Whistleblower

Beginning of a Whistleblower Bernie Ebbers, Scott Sullivan, and other members of top management intentionally led Mississippi’s pride and joy, WorldCom, on a 5-quarter charade filled with smoke, mirrors, and much intimidation. They did it hotly pursuing success, monetary gain, and the praise of their fellow statesmen. They did it by abusing work relationships and intimidating employees with promises and threats. Ultimately, they ended up “losing their footing” which caused them and, in turn, others...

Accounting scandals, Bernard Ebbers, Certified Fraud Examiner 3909  Words | 12  Pages

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Worldcom

Worldcom appeared to be a great success story. However, the success began to unravel with the accumulation of debt and expenses, the fall of the stock market, and long distance rates and revenue. It would take 2 years for the extent of these problems to become public, and accounting scandals like that of Worldcom would make history in the finance and telecommunication areas. While the intent is to make money to benefit a person or a group of people through illegal acts while disguising their illegal...

Accounting scandals, Arthur Andersen, Audit 1366  Words | 4  Pages

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Worldcom

Why was the fraud committed? WorldCom fraud is one of the leading corporate frauds in history and especially on American soil. The fraud was estimated to be worth more than $ 11 billion of fraudulent accounting entries and misstatements. This represented about 28.89 % of the company’s revenue for the year 2002 (Jennings 67). Such a fraud has been a significant challenge in the accounting sector, and the main reason for the fraud is not yet established. According to Securities and Exchange Commission...

Accounting scandals, Auditing, Business ethics 1077  Words | 3  Pages

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worldcom

WorldCom Ethical Scandal In the late 1990’s, WorldCom was a successful company and leader in the telecommunications world. They had merged with MCI and the company was regarded for being innovative and growth hungry. However, in the midst of all the mergers WorldCom CEO Bernard Ebberly began to mismanage the company. WorldCom was no longer meeting their numbers and it looked like stock prices would fall. Rather than letting this happen, executives at WorldCom doctored the books. CFO Scott...

Accounting scandals, Bernard Ebbers, Corporate governance 1438  Words | 5  Pages

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WorldCom

 CASE NAME: WorldCom: Keeping Planes In the Air 1. Briefly describe the important aspects of the situation. WorldCom had asked its accountant to make accounting entries dipping into reserves to help the company to meet its earnings target. WorldCom had been done these financial reserves for three quarters and intended to do so thereafter. The telecommunications industry was in a severe slump. WorldCom had a slow growth and rising cost. Vinson, who had done WorldCom’s...

Accountancy, Accountant, Bookkeeping 591  Words | 3  Pages

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Worldcom

WorldCom Introduction WorldCom Inc. began as a small Mississippi provider of long distance telephone service. During the 1990s, the firm made a series of procurements of other telecommunications firms that boosted its reported revenues from $154 million in 1990 to $39.2 billion in 2001, placing it 42nd among Fortune 500 companies. Significant procurements included the 1998 takeover of MCI, which made it the second largest U.S. long distance carrier, and the purchases of UUNet, CompuServe and...

Accounting scandals, Arthur Andersen, Bernard Ebbers 2314  Words | 7  Pages

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Worldcom

Q 1 Explain the nature of accounting fraud? A1. Background: The origin of WorldCom can be traced to the breakup of AT&T in 1983. The company began as Long Distance Discount Services Inc during 1983. LDD name was changed to WorldCom in 1995. To build the economies of scale that were critical success factor in long distance market it was imperative for WorldCom to grow its available volume off bandwidth as it lowered the per unit costs. Also the Telecommunication act of 1996 permitted long...

Accounting scandals, Creative accounting, Fraud 1499  Words | 5  Pages

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Worldcom

Abstract This paper explores the Accounting fraud that took place at WorldCom. Three aspects of the corporate culture are discussed including WorldCom’s harsh top-down management approach, the lack of written rules or a code of conduct, and the inaccessibility of many of WorldCom’s departments. The CEO’s desire to be the #1 stock on Wall Street is also discussed. WorldCom’s inappropriate booking and releasing of accruals is explored and proper accrual accounting procedures are stated. Three...

Accounting scandals, Accrual, Arthur Andersen 1310  Words | 4  Pages

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Worldcom

costs of $14,739 million for 2001. The journal entry for these transactions is debit to Line Costs Expense for $14,739 million and a credit to Cash for the same amount. Line costs are fees that WorldCom paid to other telecommunication companies to use their networks for long distance calls. d. WorldCom capitalized $3.8 billion in line cost expenses. These were transactions that involved payment to local telephone companies to use their fiber optic network. These line costs are also called access...

Asset, Balance sheet, Depreciation 1138  Words | 4  Pages

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Worldcom: Final Catalyst

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...

1035  Words | 4  Pages

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Kasus Enron

ETIKA BISNIS DAN PROFESIONAL AKUNTAN DALAM MENILAI KINERJA PERUSAHAAN UNTUK KASUS ENRON LATAR BELAKANG Amerika Serikat yang selama ini dianggap sebagai Negara super power dan juga kiblat ilmu pengetahuan termasuk displin ilmu akuntansi harus menelan kepahitan. Skandal bisnis yang terjadi seakan menghilangkan kepercayaan oleh para pelaku bisnis dunia tentang praktik Good Corporate Governance di Amerika Serikat. Enron merupakan perusahaan dari penggabungan antara InterNorth (penyalur...

1998  Words | 7  Pages

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Worldcom Failure

WorldCom Failure in relation to its Organizational Behavior LDR/531 - Organizational Leadership October 7, 2010 WorldCom Failure in relation to its Organizational Behavior INTRODUCTION Year 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing, etc. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. Many people may question if there is a secret to operating a successful business in modern times....

Accounting scandals, Bernard Ebbers, Business ethics 1183  Words | 4  Pages

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WorldCom Notes

[1] What business was WorldCom in? WorldCom was in the business of telecommunications. Where was WorldCom located? WorldCom was located in Clinton, Mississippi. Who was the CEO? The CEO was Bernie Ebbers. Who was the CFO? The CFO was Scott Sullivan. What are the names of the two members of the internal audit staff who worked with Cynthia on their secret investigation? Gene Morse and Glyn Smith What made the internal auditors think that possibly there was a need to investigate WorldCom’s...

Audit, Auditing, External auditor 1027  Words | 4  Pages

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Worldcom Case

3) Roots of the scandal The roots of the fraud and the role of internal auditors As explained above, the fraud was implemented by the former CEO Bernard Ebbers and commited by his financial director Scott D. Sullivan. The technique used by Worldcom was pretty simple; indeed, he cooked the books by saving pure operating expenses such as maintenance network in capital expenditure instead of expenses in order to hide its decreasing earnings and to maintain the price of Worldcom’s stock. In summary...

Accounting scandals, Audit, Auditing 1071  Words | 3  Pages

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Worldcom Case

payable and accrued line costs |   | $ 14,739 | WorldCom paid outside service providers to carry some parts of its calls and to carry its customers’ calls on those lines. These costs were fixed monthly payments for the use of lines, regardless of whether the WorldCom or its customers used those lines or not. e- In the case, line costs are capitalized. Capitalized expenditures are booked as assets. In the balance sheet of WorldCom, capitalized line costs must be seen under the transmission...

Accounts receivable, Asset, Balance sheet 708  Words | 3  Pages

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Fraud at WorldCom

M1. Case Study Assignment: Fraud at WorldCom 1. Who were the major characters in WorldCom? There are a couple of major characters that played their roles in the downfall of WorldCom. Mr. Bernard J. (Bernie) Ebbers, one of the founders of the original small long-distance carrier, was asked to take charge of the company during its early struggles. It was under his tenure that WorldCom began its expanding pursuits and aggressive acquisitions. Although Mr. Ebbers was he head of the company, their CFO...

Bernard Ebbers, Business ethics, Ethics 1019  Words | 3  Pages

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Enron and WorldCom

 Enron and WorldCom FIN/486 December 22, 2014 Enron and WorldCom In 1998, Waste Management executives acknowledged earnings misstatements of approximately $1.7 billion. With the help of the Arthur Anderson accounting firm, Waste Management shareholders lost more than $6 billion dollars (CNN, 2001). The Waste Management corruption ushered in a series of corporate scandals into the new millennium. Enron and WorldCom were only two of many ethical and accounting violations that prompted new legislation...

Accounting scandals, Arthur Andersen, Bernard Ebbers 853  Words | 5  Pages

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Worldcom Failure

Examining a Business Failure: WorldCom WorldCom was one of several large companies that failed because of inadequate organizational leadership, fraud, conspiracy, falsifying documents, and embezzlement. WorldCom has been classified as being “one of the biggest corporate scandals in Unites States history” (Zekany, 2004, p. 101). In 2001, the company’s financial condition began to decline due to the slowing telecommunications industry, which eventually put pressure on the company’s executive...

Chief executive officer, Corporate governance, Executive officer 1203  Words | 4  Pages

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WORLDcoM

Accounting Fraud at WolrdCom Introduction WorldCom, US second largest telecommunication company shocked the world by filing bankruptcy at 21 July 2002. The WorldCom filing surpassed Enron and became the largest bankruptcy filing in United States history. Due to its rapid growth, WorldCom is also heavily in debt as they finance the company growth with debt. The collapse of WorldCom did not just affect their employees, retailers, the government but also bankers. WorldCom was a multi-billion dollar telecommunications...

Accounting scandals, Audit, Auditing 6193  Words | 28  Pages

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David Myers, Worldcom

Introduction WorldCom was America's second largest telecom company in 2000 (The WorldCom Accounting Scandal, 2002). Making a modest beginning in the hinterland of Mississippi in 1983 with a meager capital of less than 100,000 USD it reached the pinnacle of corporate success reporting more than USD 39 billion in revenue and USD 150 million in MCAP (The WorldCom Accounting Scandal, 2002). In the process it became 42nd in the Fortune 500 list. Under the leadership of CEO Bernie Ebbers it grew rapidly...

Accounting scandals, Audit, Corporate governance 1784  Words | 6  Pages

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Worldcom Accounting Analysis

WorldCom WorldCom was a global communication company that provided data, internet and voice services. Their scope of operations was in over 200 countries on six continents. Their use of the internet as the communication network allowed them to shed geographic restraints and become one of the largest carriers of international voice traffic. WorldCom was incorporated in Delaware in 1972 as the Advantage Company, Inc. and was later reincorporated and operated out of Georgia where in 1993 there was...

Bernard Ebbers, Financial statements, Fraud 960  Words | 3  Pages

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Worldcom Bond Issuance

WORLDCOM, INC: CORPORATE BOND ISSUANCE 1. IS IT A GOOD TIME FOR WORLDCOM, INC. TO ISSUE? CONSIDER FACTORS IN FAVOR AND FACTORS THAT ARE NOT IN FAVOR. Personally I believe that the time is not in favor of WorldCom in undertaking one of the largest bond issues at the time. Even though there are many advantages with proceeding with the issue, I believe that the degree and the uncertainty raised by some of the disadvantages outweigh the advantages of going ahead with the $6Billion...

Bond, Credit, Debt 954  Words | 3  Pages

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Accounting Froud at worldcom & executive

Information This report details the rise and collapse of WorldCom Group: this telecommunication giant employed 60,000 individuals and had over $104 billion in assets. However, most numbers were deliberately misstated in order to maximize income and survive in the global stock market. WorldCom dates back to 1983 when in split up from AT&T to create a separate entity in order to take over the Southern states telecommunication markets. WorldCom focused on providing Long Distance Discount Services (LDDS)...

Asset, Balance sheet, Cash flow 2490  Words | 7  Pages

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Kasus Lehman Brothers

KASUS “Lehman Brothers, Inc.” Disusun Oleh : Kelompok 1 Simon Petrus 731015327 Kartika Susanti 731015331 Deranika R. Kristiana 731015335 Riyan Ganda Pratama 731015339 Febi Arisandi 731015345 M. Rimawan 731015350 PPA SEKOLAH TINGGI ILMU EKONOMI YKPN YOGYAKARTA 2010 Ringkasan Kasus Lehman Brothers Holdings, Inc. adalah perusahan jasa keuangan global yang didirikan tahun 1850. Perusahaan ini bergerak di bidang bank investasi, perdagangan saham dan obligasi, riset pasar, manajemen...

1166  Words | 5  Pages

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Worldcom Case Study

was that of WorldCom. In 1983 Bernie Ebbers and several other people invested in a newly formed company in Clinton, Mississippi called Long Distance Discount Services, Inc. (LDDS). LDDS was a provider of long distance telephone service to residential and commercial markets. Ebbers became CEO of LDDS in 1985. In 1989 the company merged with Advantage Companies, Inc. and became publicly traded. In 1995 the company name was changed to LDDS WorldCom, and later to just WorldCom. WorldCom grew to be...

Accounting scandals, Bernard Ebbers, Capital expenditure 1872  Words | 6  Pages

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Management Planning: Worldcom

the executives employed at WorldCom. Before 2002, WorldCom was one of the top telecommunication businesses in its industry because of many acquisitions obtained by the company. Due to the increased popularity of the internet and the acquirement of UUNet and MCI Communications, WorldCom share significantly increased. According to Moberg and Romar (as cited in Browning, 1997) "By 1997, WorldCom's stocks had risen from pennies per share to over $60 a share." WorldCom had become an attractive investment...

Business ethics, Corporate governance, Corporate social responsibility 1267  Words | 4  Pages

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Management Planning Paper Worldcom

Management Planning Paper Vernita M. Blacksher Introduction: We will be evaluating the planning function of the upper level management of the Company formerly called WorldCom. We will look at some of the actions taken by upper level management, their decision making and what actions were taken to achieve short-term goals. We will be analyzing the influence legal issues, corporate social responsibility, and ethics had on WorldCom’s management planning...

Asset, Balance sheet, Bernard Ebbers 979  Words | 3  Pages

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Enron and Worldcom Case Study

Enron and WorldCom Case Study This report is based on the demise of Enron Corporation and WorldCom. Both the firms are demised due to the ethical lapses. These ethical lapses come into existence when managements of the firm, uses unethical practices to accomplish the goals of the firm. Maintaining financial and accounting standards in the business practices are necessary. The profession of accounting has become a mockery due to the accounting scandals that took place all over the world in the...

Accounting scandals, Business, Business ethics 1225  Words | 4  Pages

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Accounting Fraud at Worldcom 2

Accounting Fraud at WorldCom Vanessa Gail Woods Strayer University Connor-Green/ACC 576 March 21, 2010 Accounting Fraud at WorldCom The break up of AT&T opened the long distance service market to small companies during the mid- to late-1980s and 1990s. Long Distance Discount Service (LDDS) opened in 1983 with moderate growth until its stock went public in 1989. CEO Bernie Ebbers decided to grow the organization through acquisitions (70 companies over the course of its lifetime)...

Bernard Ebbers, Corporate governance, Enron 1405  Words | 5  Pages

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The WorldCom Accounting Scandal

The WorldCom Accounting Scandal WorldCom was started in Mississippi as a long distance telephone service provider in 1983 (Lyke and Jickling, 2). Over the next decade and a half, the company expanded to offer a whole range of telecommunication services through a series of mergers and acquisitions (Lyke and Jickling, 2). At its height, WorldCom was the largest long distance phone company in the United States and was one of the leading companies in the telecommunication market in the world, providing...

Accounting scandals, Arthur Andersen, Capital expenditure 1418  Words | 5  Pages

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Leadership, Management, and the Failure of Worldcom

and the tactics and behaviors that would ultimately lead to the downfall and closure of the company. One of the most famous was Enron, but another well known failure was that of WorldCom. WorldCom was a big player in the telecommunications industry, being the largest telecom carrier of Internet traffic. In 2002, WorldCom joined the ranks of failed companies mostly because of the tactics that management and its accountants used to show that the company was earning more money than it was. This was...

Bernard Ebbers, Corporate governance, Corporation 1072  Words | 3  Pages

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Far600 Case Study Worldcom

FAR600 CASE STUDY WORLDCOM QUESTION 1 a) Discuss the earnings management technique employed by the management of World Com. WorldCom admitted that the company had classified over $3.8 billion in payments for line costs as capital expenditures rather than current expenses. Line costs are what WorldCom pays other companies for using their communications networks; they consist principally of access fees and transport charges for messages for WorldCom customers. Reportedly, $3...

Accounting scandals, Corporate governance, Dennis Kozlowski 969  Words | 4  Pages

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Worldcom Case Study

WorldCom Case Study: Lack of Leadership, Lack of Ethics Emily Fearnow ORG 500- Foundations of Effective Management Colorado State University – Global Campus Dr. Cheryl Lentz May 15, 2011 WorldCom Case Study: Lack of Leadership, Lack of Ethics A multitude of choices made by executives at WorldCom led to the ultimate demise of the company as it was previously known, the employees and their livelihoods’, and the trust of the American people. In a time when corporations...

Business ethics, Company, Corporate governance 1529  Words | 5  Pages

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Worldcom - Accounting Ethics

Review of Accounting Ethics – Worldcom ACC557 Financial Accounting Cornelia H. Brown Strayer University Review of Accounting Ethics - Worldcom In a business world pressured to meet organizational objectives such as high revenue growth it is not alarming that conduct by decision makers may be deemed as questionable practices. These practices within the past two decades have resulted in a number of organizations finding themselves confronted with ethical dilemmas and the aftermath...

Audit, Business Decision Mapping, Business ethics 1218  Words | 4  Pages

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Enron, Worldcom, Madoff Case

S. history until WorldCom's bankruptcy the following year. WORLDCOM Resources: http://voices.yahoo.com/worldcom-scandal-look-back-one-biggest-225686.html WorldCom Scandal: A Look Back at One of the Biggest Corporate Scandals in U.S. History In 1998, the telecommunications industry began to slow down and WorldCom's stock was declining. CEO Bernard Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses endeavors...

Accounting scandals, Bernard Madoff, Fraud 1126  Words | 3  Pages

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Accounting Fraud at Worldcom

Accounting Fraud at WorldCom LDDS began operations in 1984 offering services to local retail and commercial customers in the southern states. It was initially a loss making enterprise, and thus hired Bernie J. (Bernie) Ebbers to run things. It took him less than a year to make the company profitable. By the end of 1993, LDDS was the fourth largest long distance carrier in the United States. After a shareholder vote in May 1995, the company officially came to be known as WorldCom. WorldCom culture was...

Accountancy, Accountant, Accounting scandals 739  Words | 3  Pages

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The Enron and Worldcom Scandals

Fastow appointed Michael Kopper who worked for him at Enron, to manage Chewco (Brooks, 2007). WORLDCOM 1. To inflate their profit in the current period, WorldCom created overstatements of cash flow and income by inaccurately reporting line costs. Line costs were a major expense to WorldCom. They were payments WorldCom made to third party telecommunicator network providers for the right to access their networks. These costs should have...

Accounting scandals, Andrew Fastow, Board of directors 868  Words | 3  Pages

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Worldcom & Enron Fraud & Bankruptcy

WorldCom Fraud & Bankruptcy (21/07/2001); Assets: $107 billion Long Distance Discount Services, Inc. (LDDS) began in Hattiesburg, Mississippi. in 1983. The company name was changed to LDDS WorldCom in 1995, and later just WorldCom. The company’s growth under WorldCom was fueled primarily through acquisitions during the 1990s and reached its apex with the acquisition of MCI in 1998. WorldCom’s financial scandals and bankruptcy led that company to change its name in 2003 to MCI. The MCI name disappeared...

Accounting scandals, Arthur Andersen, Bernard Ebbers 927  Words | 3  Pages

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The Rise and Fall of Worldcom

Wan-Ting Shao * Ananya Chandra * Niteesh Chinta * Shraddha Rane * Swathi Punreddy The Rise and fall of WorldCom This case study WorldCom is a telecommunications company which was led by CEO, Bernard Ebbers, and CFO, Scott Sullivan. In 1999, WorldCom was not meeting Wall Street’s revenue and earnings expectations, and it appeared that the coming year would produce more bad news. The CFO argued for setting realistic targets....

Bernard Ebbers, Case study, Control 922  Words | 3  Pages

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Accounting Mba- Worldcom

WorldCom Sunday, November 07, 2010 10:27 PM The following entries are hypothetical and intended to illustrate the initial recording, and subsequent ‘release’ and ‘capitalization’ of line costs. a. Prepare a journal entry to record $3,500 million of estimated line costs for quarter 1. DR - Accrued Line cost $3,500 CR - Cash and Cash Equivalents $3,500 b. Assume that you find out in quarter 2 that the prior quarter’s estimate was too large by $100 million. Prepare the necessary journal entry...

Accrual, Asset, Atlantic City, New Jersey 790  Words | 5  Pages

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Acc260 the Enron and Worldcom Scandals

Wk2 Assignment: The Enron and WorldCom Scandals Student Name ACC/260 Date Instructors Name[Page Break] 1. Which segment of its operations got Enron into difficulties? The guaranteed loans that were intended to bridge the financing for investments from outside investors that could not be found would be the segment of operations that caused Enron difficulties. 2. Did Enron’s directors understand how profits were being made in this segment...

Accounting scandals, Board of directors, Conspiracy of Fools 537  Words | 3  Pages

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Assignment # 3 Worldcom Accounting Scandal

Assignment # 3 WorldCom Accounting Fraud By Mark A. Cowan Strayer University ACC 499- Accounting Capstone May 15, 2011 The purpose of this paper is to discuss the aspects of the WorldCom accounting scandal and the effects that this scandal had on the accounting world as we know it. We will discuss the corporate culture at WorldCom and how it contributed to the accounting fraud, how the CEO’s desire to be the #1 stock on Wall Street contributed to the fraud, pressures on accountants...

Accounting scandals, Corporate governance, Creative accounting 1495  Words | 5  Pages

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Worldcom, Inc Corporate Bond Issuance

WORLDCOM, INC: CORPORATE BOND ISSUANCE Introduction This case raises many interesting questions concerning the record setting issuance of corporate debt by WorldCom, Inc. (“WorldCom”). Both the surprisingly voluminous structure of the proposed issuance and the foreboding macro-economic climate in which it was slated spark concerns over the risk and cost of the move. One of the first questions that must be addressed is whether WorldCom’s timing was appropriate. Next, the company’s choice of...

Bond, Bonds, Debt 1129  Words | 4  Pages

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The Enron and Worldcom Scandals

The Enron and WorldCom scandals Enron #1. The segment that put Enron in difficulties was the LJM1. That SPE was the worst of all four SPE’s. This one had no independant investor that could put up the 3% that they needed for the controlling investor, where CHEWCO would work as a counterparty accounting to the U>S> guidelines. Enron already owned 97% of CHEWCO, where if they had a controlling investor, the profits from CHEWCO would go directly to Enron’s assets. Later, they did not find...

Asset, Balance sheet, Board of directors 1023  Words | 3  Pages

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Accounting Scandals. ENRON, WORLDCOM

destroying, altering, or fabricating records in federal investigations or for attempting to defraud shareholders.[5] The act also increased the accountability of auditing firms to remain unbiased and independent of their clients. WORLDCOM On June 25, 2002, WorldCom, the Nation’s second largest long distance telecommunications company, announced that it had overstated earnings in 2001 and the first quarter of 2002 by more than $3.8 billion. The announcement stunned financial analysts and, coming...

Accounting scandals, Arthur Andersen, Chief financial officer 1905  Words | 6  Pages

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Worldcom Ethical Dilemma

In 1998, Betty Vinson was promoted to a senior manager in the firm’s corporate accounting division. Two years later in her position she experienced a major ethical dilemma. The company WorldCom was a very successful company up until the middle of 2000 when the telecommunication industry entered a protracted slump. The company’s earnings were not Wall Street expectations, and it was saddled with unpaid bills. Vinson’s job was to repair the problem by doing some wrong accounting practices. The ethical...

Decision making, Ethics, Risk 971  Words | 3  Pages

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Individual Case Study-Worldcom

capitalization of operating expenses • management promoted culture fixed on the numbers • board of directors' failure to scrutinize billion-dollar acquisitions • excessive loans to executives in order protect stock prices Financial Overview of WorldCom (in Billions) Financial Highlights 1994 1999 2001 2004 Revenues $2.2 $37.1 $35.2 $20.7 Total Assets $3.4 $91.1 $103.9 $17.1 Employees $7.5 $97.6 $87.8 $40.4 Market Cap. $3.3 $150.5 $42.8 $6.4 Debt $0.8 $13.1 $30.0 $5.9 Total Capitalization...

Capital expenditure, Cost, Expense 617  Words | 3  Pages

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Effect of Internal and External Factors on Worldcom

The effects of Internal/External Factors on WorldCom Learning Team A MGT330 November 9, 2010 The Effects of Internal/External Factors on WorldCom Over the years the world has seen many corporate disasters pertaining to management. One of these disasters has been the rise and fall of WorldCom. From the beginning of WorldCom in 1983 as an obscure long distance company, the world watched as the company executed an aggressive...

Bernard Ebbers, Business ethics, Ethics 1965  Words | 7  Pages

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Behind Closed Doors at WorldCom

Behind Closed Doors at WorldCom: 2001 1. Two General Accounting employees—Dan Renfroe and Angela Walter—made journal entries in the amount of $150 million and $171 million, respectively, without detailed support. It was noted that this was not out of the ordinary at WorldCom. In your opinion, was this a proper accounting practice? Explain. Though this may not be out of the ordinary for WorldCom, this is not a correct accounting practice. The way the entries were made does not comply with the proper...

Audit, Auditing, Balance sheet 1023  Words | 3  Pages

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Worldcom: Organizational Culture and Unethical Safeguards

WorldCom: Organizational Culture and Unethical Safeguards Organizational culture is one of four influences whether an ethical or unethical behavior will be made. WorldCom’s demise, deliberately overstating their income by $7 billion between 1999 and 2002; and their once valued stock of $180 million becoming nearly worthless, can attribute a significant amount of their failure on their “dis”organizational culture. Corporations worldwide who do not think this type of fraud can happen at the hands...

Accounting scandals, Bernard Ebbers, Corporate governance 1198  Words | 4  Pages

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Accounting Scandals: Enron and WorldCom

The Accounting Scandal Enron Corp. Collapse and WorldCom Accounting Scandal 11/18/2020 The Enron Corp. collapse Formed in 1985 from a merger of Houston Natural Gas and Inter-north, Enron Corp. was the first nationwide natural gas pipeline network. Over time, the firm’s business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets. The guiding principle seems to have been that there was more money to be made in buying and selling financial...

Accounting scandals, Board of directors, Corporate governance 1082  Words | 4  Pages

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