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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Case Study The Rise and Fall of WorldcomThis case study is about Bernard Ebbers CEO of Worldcom‚ Inc. and Scott Sullivan CFO of Worldcom‚ Inc. once they were boosted the company growth and they got awards. Later on they made frauds by using their influential tactics on employees and company’s board. Those are Assertiveness: it involves applying legitimate and coercive power to influence others by threatening or giving punishment. This tactic was used by sullivans office where they berated and intimidated
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has the capability of transporting thousands of packages every day. Dividend: The company currently pays out a quarterly dividend of $0.14‚ which annualized puts the dividend as yielding 0.62%. Reasonable Valuation: The company carries a price to earnings ratio of 14.02‚ which by nearly all standards is a relatively reasonable valuation. Institutional Vote of Confidence: 78% of shares outstanding are held by institutional investors‚ displaying the huge amount of confidence long-term and big-money
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Enron and WorldCom Case Study This report is based on the demise of Enron Corporation and WorldCom. Both the firms are demised due to the ethical lapses. These ethical lapses come into existence when managements of the firm‚ uses unethical practices to accomplish the goals of the firm. Maintaining financial and accounting standards in the business practices are necessary. The profession of accounting has become a mockery due to the accounting scandals that took place all over the world in the
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Roebuck and Company took a $60 million charge against earnings after admitting that it recommended unnecessary repairs to customers in its automobile service business; Standard Chartered Bank was banned from trading on the Hong Kong stock market after being implicated in an improper share support scheme. The list goes on. In each case‚ employees broke through existing control mechanisms and jeopardized the franchise of the business. The cost to the companies- in damaged reputations‚ fines‚ business
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practices required that the company use accounting limitations to misrepresent earnings and modify the balance sheet to portray a favorable depiction of its performance. By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of Enron‚ the executives of Enron embezzled funds funneling in from investments while reporting fraudulent earnings to those investors Shareholders lost nearly $11 billion when Enron’s stock
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and closure of the company. One of the most famous was Enron‚ but another well known failure was that of WorldCom. WorldCom was a big player in the telecommunications industry‚ being the largest telecom carrier of Internet traffic. In 2002‚ WorldCom joined the ranks of failed companies mostly because of the tactics that management and its accountants used to show that the company was earning more money than it was. This was partly in part because of the CEO Benard Ebbers and his appetite for money
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UNIVERSITY OF GHANA BUSINESS SCHOOL MBA: ACCOUTING THEORY 1 – (ADMN 631) LECTURE: JAMES KWAME OTIEKU A PRESENTATION ON EARNINGS MANAGEMENT AND EXECUTIVE COMPENSATION BY EMMANUEL MENSAH ID NO: 10328957 AND PETER OPATA NYAKO ID NO: 10329653 1st October 2009 EARNINGS MANAGEMENT AND EXECUTIVE COMPENSATION Introduction Accounting standards define the accounting language that management uses to communicate with the firm’s external stakeholders. By creating a framework
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Earning a college degree has always been a very important goal of mine. My children are getting older and in a few short years will start looking into college themselves. It became more important for me now than ever to make my dream‚ my goal‚ a reality. There were many factors that came into play when I decided that this was the right time in my life to return to school. Being a non-traditional student‚ cost‚ flexibility‚ and accreditation were among the most important factors for me when choosing
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What punishment‚ if any‚ do you believe David Myers should have been given for his role in the WorldCom fraud? A2. Mr. Myers was charged with securities fraud‚ conspiracy to commit securities fraud‚ and filing false statements. Based on these charges‚ I think Mr. Myers would be sentenced to 5-8 years prison terms. In addition‚ he would be imposed with a large amount of fine. Furthermore‚ the WorldCom would take a certain amount of bonus back for the period while he was being investigated. However
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