Libor Scandal What is Libor and why does it matter? Libor stands for London Interbank Offered Rate. “It is considered to be an average interest rate which is estimated by some leading banks in London that they would be charged if borrowing from other banks.” Libor rate is considered to be the primary benchmark for short term interest rates around the world. It is the average cost of borrowing and is estimated on a daily basis by a group of banks as mentioned above. Libor rate gained momentum around
Premium Finance Hedge fund Bank
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
Premium Corporate governance Accountant Revenue
Enron: The Smartest Guys in the Room / Lack of Ethics Enron at one time was a Fortune 500 company‚ but in truth it was just a fallacy and a lie for what it truly was‚ an ethically bankrupt company that eventually became a bankrupt company. Henry Taylor‚ a 19th century statesman wrote “Falsehood ceases to be falsehood‚ when the truth is not expected to be spoken”. Enron senior management gets a failing grade on truth and disclosure. The purpose of ethics is to enable recognition of how a particular
Premium Ethics Enron Kenneth Lay
Corporate Development for Enron. 1. Sharron Watkins ignored the first signs of fraud in a selfish pursuit to develop her own career. When first warning signs of fraud happened in 1996 Watkins protested against them to higher management however got no response. Instead of alerting the public or taking legal actions she simply accepted defeat and switched divisions in the company‚ ultimately allowing her to become Vice President. Had Watkins taken action early on the scandal would have not been able
Premium Kenneth Lay Accounting scandals Morality
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
Premium Management Stock Balance sheet
The Smartest Guys in the Room It was a profound story happened between two giant companies‚ both of which once marked as one of the greatest companies for decades in the American History. Enron‚ started as Northern natural Gas Company in 1930‚ creatively making its way through the Great Depression by opening up the natural gas market with its lower cost and developing extensive pipeline network with the unlimited low-cost labor resource‚ fell apart due to its creative use of the SPEs and related
Premium Enron Audit Enron scandal
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
Premium Audit Corporate governance External auditor
SCANDALS IN 2000S Named scandals Named scandals in India Scandal Year reported Scope Location Key players Summary 2012 Indian coal mining controversy 2012 185‚591.34 crore (US$33.78 billion) nation Comptroller and Auditor General of India‚ the coal ministry‚ many electricity boards and private companies coal blocks allotted‚ not auctioned‚ leading to estimated losses as per the Comptroller and Auditor General of India [1][2][3] Karnataka Wakf Board Land Scam 2012 200‚000 crore
Premium States and territories of India Bharatiya Janata Party Uttar Pradesh
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
Premium Asset Balance sheet Generally Accepted Accounting Principles
“What Went Wrong at Enron?” Trident University International Phillip M. Cherry Module 5 Case Assignment ETH 501: Business Ethics Dr. Michael Garmon March 1‚ 2012 3/1/2012 Introduction In this paper I will provide a critical evaluation of the Corporate Culture at Enron‚ explain how the business ethics and operations were influenced by the corporate culture‚ and what went wrong. In addition
Premium Enron