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 dilemma is weather she should or shouldn’t do and the consequences if she does or doesn’t do. What ethical decision should Betty Vinson
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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
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the actions taken by WorldCom managers not detected earlier? What processes or systems should be in place to prevent or detect quickly the types of actions that occurred in WorldCom? The first reason is that both internal audit and external audit of WorldCom were not performing their role as intended. Generally‚ internal audit mainly focus on the reliability of financial reporting and the effectiveness of operations‚ and reports directly to the Board of Directors. In WorldCom‚ however‚ internal audit
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will be recorded as prepaid insurance and deductions will be made monthly as the monthly cost‚ $2000‚ expired. c- According to company’s most recent annual report‚ line costs consist of access charges and transport charges. We cannot understand what portion of the line costs are paid by cash or journalized by accrued expenses.
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What are the ethical issues raised with abortion? (25 Mark) Abortion raises issues such as murder is wrong‚ personhood and the sanctity of life. These issues can help decide whether abortion is right or wrong but may sometimes still leave you undecided. The catechism teaches that human life is a gift from God and is precious from its beginning to end. Only God can give or take it away; so when the idea of abortion comes in‚ Christians would disagree with it as it foes against the sanctity of life
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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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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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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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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
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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 accounting
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