Concepts a. (i.) According to FASB Statement of Concepts No. 6‚ paragraph 25‚ assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. They represent probable future economic benefits controlled by the enterprise. According to FASB Statement of Concepts No 6‚ paragraph 80‚ expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) during a period from delivering or producing
Premium Depreciation Generally Accepted Accounting Principles Asset
such a scenario‚ it becomes all the more imperative to prevent violations itself from becoming norms‚ to protect public interest from huge corporate scandals. In an attempt to safeguard the corporations and the economy on the whole‚ a robust whistleblower policy as part of the corporate governance strategy is a very valuable tool. It empowers employees to act on incidences of misconduct and help maintain a safe workplace‚ while protecting profits and reputation.
Premium
Accounting Fraud at WolrdCom Introduction WorldCom‚ US second largest telecommunication company shocked the world by filing bankruptcy at 21 July 2002. The WorldCom filing surpassed Enron and became the largest bankruptcy filing in United States history. Due to its rapid growth‚ WorldCom is also heavily in debt as they finance the company growth with debt. The collapse of WorldCom did not just affect their employees‚ retailers‚ the government but also bankers. WorldCom was a multi-billion dollar telecommunications
Premium Board of directors Corporate governance Fraud
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
Premium Audit Auditing Accounting scandals
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
Premium Ethics Internal audit Morality
WorldCom Ethical Scandal In the late 1990’s‚ WorldCom was a successful company and leader in the telecommunications world. They had merged with MCI and the company was regarded for being innovative and growth hungry. However‚ in the midst of all the mergers WorldCom CEO Bernard Ebberly began to mismanage the company. WorldCom was no longer meeting their numbers and it looked like stock prices would fall. Rather than letting this happen‚ executives at WorldCom doctored the books. CFO Scott
Premium Fraud
Q 1 Explain the nature of accounting fraud? A1. Background: The origin of WorldCom can be traced to the breakup of AT&T in 1983. The company began as Long Distance Discount Services Inc during 1983. LDD name was changed to WorldCom in 1995. To build the economies of scale that were critical success factor in long distance market it was imperative for WorldCom to grow its available volume off bandwidth as it lowered the per unit costs. Also the Telecommunication act of 1996 permitted long
Premium Fraud Accounting scandals Generally Accepted Accounting Principles
WorldCom Scandal Formerly known as WorldCom‚ now known as MCI‚ this U.S.-based telecommunications company was at one time the second-largest long distance phone company in the U.S. Today‚ it is perhaps best known for a massive accounting scandal that led to the company filing for bankruptcy protection in 2002. In 1998‚ the telecommunications industry began to slow down and WorldCom’s stock was declining. CEO Bernard Ebbers came under increasing pressure from banks to cover margin calls on
Premium Corporate governance Fraud Bankruptcy
Case Studies: 4.1 & 5.2 Labor/Management Relations June 15‚ 2013 The labor and management sides both have a great deal of power regarding workplace rules and conditions. The management side has the power to choose the labor relations strategy that it thinks will best suit its needs. The strategies chosen are determined by several things like “managerial philosophy‚ [or] the ethics of its management” (Holley et al‚ 2008‚ pg 119). It seems as though today most large organizations prefer
Premium Employment Trade union
Checkouts The theme of the short story Checkouts by Cynthia Rylant is expressed with love. The two characters in the story seem to over complicate the theme‚ and make it more and more difficult to decide on a particular moral‚ or theme. Towards the end of the story however‚ it begins to appear more obvious‚ and clear‚ as to what the theme is. It starts to stand out as the story progresses and we find out where they each go with their lives. “ This is often the way of children‚ when they truly want
Premium Psychology Thought Emotion