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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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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References: WorldCom profits scandal shakes stock markets‚ The Telegraph‚ 27 Jun 2002 (http://www.telegraph.co.uk/news/worldnews/northamerica/usa/1398577/WorldCom-profits-scandal-shakes-stock-markets.html) Haywood‚ Elizabeth M.‚ Dorothy A. McMullen‚ and Donal E. Wygal‚ 2004‚ Behind closed doors at WorldCom: 2001‚ Accounting Education‚ 19‚ 101-118. Wearing R.‚ Cases in Corporate governance (2005)‚ Sage Publications
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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.
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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
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Airion Andrews January 23‚ 2011 English 9 Book Report Have you ever thought‚ “I’m never going to get cancer?” Well‚ I’m pretty sure that’s how all of us in the world think because none of us want to be put in that position since it’s a scary yet a dangerous thing to deal with. In my book‚ ‘What Girls learn‚’ by Karin Cook‚ it never occurred to Frances that she would be endangered by breast cancer. In this book‚ two young girls find themselves growing up fast when love and tragedy visit their
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KAPLAN DAVID KIRON Accounting Fraud at WorldCom WorldCom could not have failed as a result of the actions of a limited number of individuals. Rather‚ there was a broad breakdown of the system of internal controls‚ corporate governance and individual responsibility‚ all of which worked together to create a culture in which few persons took responsibility until it was too late. — Richard Thornburgh‚ former U.S. attorney general1 On July 21‚ 2002‚ WorldCom Group‚ a telecommunications company with
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Auditing Case 6.3 Question 1 Recent Developments in WorldCom Case * March 26‚ 2010: Third Distribution of Settlement Fund Made in Accordance with Court Order of September 18‚ 2009. * September 18‚ 2009: Judge Cote Grants Approval of the Final Distribution Plan * February 15‚ 2008: Second Distribution of Settlement Fund Made in Accordance with Court Order of January 23‚ 2008. * January 23‚ 2008: Judge Cote Grants Approval of Second Distribution of Net Settlement Fund. Question
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records. Enron’s legal department wrote contracts that helped provide a cover for misuse of funds regarding the SPEs. Future revenue was reported as current revenue. Stocks were paid with promissory notes instead of cash. They also engaged in off-the-books activities and excessive executive compensation. Enron’s board of directors allowed the executives‚ accountants and legal department to use Special Purpose Entities (SPEs)‚ a type of partnership‚ in an attempt to camouflage their debt and create a
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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
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