Enron and its Associates Used Questionable Accounting Practices Clearly‚ there have been cases where management knowingly deceived the auditors. Then there seem to be other instances where the accounting treatment envelope was pushed just a bit too far. In the case of Enron‚ David B. Duncan‚ the former Andersen partner in charge of the Enron audit who was the government’s chief witness in the trial against Arthur Andersen‚ stood behind the decisions that resulted in the widespread use of off-balance
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AVOIDING INVESTMENTS IN FRAUDULENT COMPANIES: THE WORLDCOM FRAUD Introduction The purpose of this report is to investigate and discuss the accounting fraud that occurred at WorldCom in order to recommend improved strategies to Berkshire Hathaway’s management for avoiding investments in companies with fraudulent financials. Accounting fraud is a crime committed by high level employees at an organization to manipulate the organization’s financial statements and intentionally disguise company
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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
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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.
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An Ethical Dilemma at WorldCom: A case study of Cynthia Cooper The Scenario One May afternoon‚ while sitting in his cubicle at WorldCom Inc. headquarters located in Clinton‚ Mississippi‚ Gene Morse was stunned to find an accounting entry for $500 million in expenses‚ which was not accounted for with any invoices. He immediately reported this entry to his boss‚ vice president of internal audit Cynthia Cooper (Pulliam & Solomon‚ 2002). Little did they know at the time that this discovery would begin
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The WorldCom scandal was actually brought to light by the internal auditor‚ Cynthia Cooper. Cooper and her team‚ Gene Morse and Glyn Smith uncovered the fact that line costs were being transferred to capital accounts. Cooper was originally tipped off to the fact that something was amiss when the head of WorldCom’s wireless business paid her a visit‚ upset that he was loosing $400 million that had been set aside to make up for shortfalls if customers didn’t pay their bills. Scott Sullivan‚ CFO of
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SUBJECT: Accounting fraud at WorldCom Problem Statement WorldCom penetrated the largest accounting fraud in U.S history by overstating its tax income between 1999 and 2002. The main players in WorldCom’s accounting fraud included CFO Scott Sullivan‚ the General Accounting and Internal Audit departments‚ external auditor Arthur Andersen‚ and the board of directors. While individuals did have their own sins‚ employees cowardice and self-interested‚ the board passive and ineffective‚ external auditors
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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
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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
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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
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