to act ethically. When an individual is asked to do something that they may even suspect would be detrimental to their livelihood‚ then they have all the rights given to them to not follow through with that action. In the case of Betty Vinson of WorldCom‚ while she had the clear understanding that her actions were wrong‚ she clearly kept personal financial safety ahead of her moral and ethical standards. This eventually translated into an even more detrimental result‚ which was jail time. She clearly
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Behind Closed Doors at WorldCom: 2001 1. Two General Accounting employees—Dan Renfroe and Angela Walter—made journal entries in the amount of $150 million and $171 million‚ respectively‚ without detailed support. It was noted that this was not out of the ordinary at WorldCom. In your opinion‚ was this a proper accounting practice? Explain. Though this may not be out of the ordinary for WorldCom‚ this is not a correct accounting practice. The way the entries were made does not comply with the proper
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capitalization of operating expenses • management promoted culture fixed on the numbers • board of directors’ failure to scrutinize billion-dollar acquisitions • excessive loans to executives in order protect stock prices Financial Overview of WorldCom (in Billions) Financial Highlights 1994 1999 2001 2004 Revenues $2.2 $37.1 $35.2 $20.7 Total Assets $3.4 $91.1 $103.9 $17.1 Employees $7.5 $97.6 $87.8 $40.4 Market Cap. $3.3 $150.5 $42.8 $6.4 Debt $0.8 $13.1 $30.0 $5.9 Total Capitalization
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Copyright Financial Times Information Limited Jul 9‚ 2002 Ron Beaumont‚ chief operating officer of WorldCom‚ is one of several senior executives who should have been aware of discrepancies in the telecommunications company’s books before the near-$4bn fraud was revealed last month‚ according to people close to the company. The fraud that was allegedly engineered by Scott Sullivan‚ the chief financial officer who was fired the day the scandal was announced‚ led to a massive overstatement of WorldCom’s
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WorldCom was one of the leading telecommunication companies prior to its application for bankruptcy protection on July 21st‚ 2002. The firm’s decision to file for bankruptcy was a shocker move considering the amount of revenues and asset base the company had. It is believed that the firm was highly involved in fraudulent bookkeeping between the year 1999 and 2000 where they had managed to overstate its taxable income by at least $7 billion. It was also revealed that the company had committed itself
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WORLDCOM‚ INC: CORPORATE BOND ISSUANCE Introduction This case raises many interesting questions concerning the record setting issuance of corporate debt by WorldCom‚ Inc. (“WorldCom”). Both the surprisingly voluminous structure of the proposed issuance and the foreboding macro-economic climate in which it was slated spark concerns over the risk and cost of the move. One of the first questions that must be addressed is whether WorldCom’s timing was appropriate. Next‚ the company’s choice of
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WorldCom: Organizational Culture and Unethical Safeguards Organizational culture is one of four influences whether an ethical or unethical behavior will be made. WorldCom’s demise‚ deliberately overstating their income by $7 billion between 1999 and 2002; and their once valued stock of $180 million becoming nearly worthless‚ can attribute a significant amount of their failure on their “dis”organizational culture. Corporations worldwide who do not think this type of fraud can happen at the hands
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Theory Evaluation Formation EVOLUTIONARY We form relationships to pass on genes M: risk of uncertain paternity and cuckoldry‚ low level of parental investment F: risk losing M to other F and their resources‚ high level of parental investment M look for reproductive value e.g. youth‚ wide hips F look for socioeconomic advantages e.g. wealth‚ kindness REWARD NEED We are attracted to people who we find rewarding and form relationships as life alone is unrewarding. Done through:
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Conflict in Ethical Decision Making at WorldCom Kerry Seeley Business Ethics MT4200 National American University September 25‚ 2007 Craig Chaplin Abstract This paper explains how WorldCom began and where it’s at now. It didn’t take long for WorldCom to become the second largest long distance phone company. WorldCom provided a legal framework for people working in communication projects on an individual basis‚ mainly in Central America‚ but they also developed projects together with partners
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Assignment # 3 WorldCom Accounting Fraud By Mark A. Cowan Strayer University ACC 499- Accounting Capstone May 15‚ 2011 The purpose of this paper is to discuss the aspects of the WorldCom accounting scandal and the effects that this scandal had on the accounting world as we know it. We will discuss the corporate culture at WorldCom and how it contributed to the accounting fraud‚ how the CEO’s desire to be the #1 stock on Wall Street contributed to the fraud‚ pressures on accountants to book
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