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
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“mega-deals” • Purchased over 60 firms in 2nd half of the 90’s • WorldCom moved into Internet and data traffic – Handled 50% of US Internet traffic Handled © –2003‚ 2005 by50% the of e-mails worldwide AICPA WorldCom’s Background (con’t) • Purchased MCI for $37 billion in 1997 – Not allowed to purchase Sprint in 2000 because of antitrust regulation. • In 1999 revenue growth halted; stock price dropped • By 2001 owned a third of the US data cables • Was U.S.’ 2nd largest long-distance operator in
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p. 2). As a result of the Telecommunications Act of 1996 permitting long-distance carriers to offer local services‚ WorldCom used its highly valued stock to outbid British Telephone and GTE to acquire MCI for $42 billion in 1997. Ebbers and Sullivan were viewed as industry leaders after the MCI and dozens of other mergers; it was clear they had money on their mind‚ “Our goal is not to capture market share or to be global. Our goal is to be No.1 stock on Wall Street” (Kaplan & Kiron‚ 2007‚ p. 4)
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Introduction By June 2002‚ it had become evident to the SEC that WorldCom had engaged in a significant corporate accounting fraud scheme which had overstated pretax income by about $7 billion since 1999. At the time‚ this was the largest deliberate misstatement in US corporate history. Although there are many interesting elements and players involved with this incident‚ for the purpose of this case study I will focus on the role played by Betty Vinson‚ the Director of Management Reporting and
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This paper will explain the 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
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company embarked on an aggressive acquisition strategy to expand into these markets. The acquisitions included the following telecommunication companies: MFS and UUNET (1996)‚ Brooks Fiber Properties‚ CompuServe Corporation‚ ANS Communications and MCI (1998); Skytel and Sprint (1999). Although the Sprint merger failed‚ Worldcom became the second-largest telecommunications provider in the United States. During this time span year over year revenue growth was 50 percent in 16 of 23 quarters. (Thibodeau
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police report from the accident‚ medical report from your doctors at both hospitals‚ all medical bills relating to your accident‚ motorcycle license‚ contract with MCI Records‚ and a copy of your driving record and physical therapy report. There are also a couple of questions that I would like to ask you. I’m going to ask that you answer all questions as truthfully as you can when you come in for your appointment. Some questions I have for you are: Were you distracted at all while driving down
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previously mentioned‚ for many years‚ researchers have been studying the “gap” between the normal ageing process and the onset/early onset of Alzheimer’s Disease (AD). This “gap” has since become known as the intermediate stage‚ Mild Cognitive Impairment (MCI). The discovery of this intermediate stage is a relatively new topic which requires further research into certain areas. Some of these areas include: an agreed upon diagnostic criteria‚ the causes and the treatments. Without an agreed upon diagnostic
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The MCI’s source of funds has been emission of stocks. Common stocks as IPO of 6M shares and $27.070.000‚00. An issue of 9.600.000‚00 common stock 5 years warrant attached. What have been MCI sources of funds in the past (1972-1983)? What’s your opinion? Around 1972 MCI issued equity and later on time when the company started going well they issued debentures and convertible debentures. The main raison to do that is because equity cost use to be higher. First of all they issued debentures
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Devon Daniel Verizon 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
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