WORLDcoM
CASE 3 : Accounting Fraud at WolrdCom
Table of Contents
Introduction....................................................................................................................... 1
Question 1 .......................................................................................................................... 2
Question 2 .......................................................................................................................... 4
Question 3 .......................................................................................................................... 6
Question 4 ........................................................................................................................ 10
Question 5 ........................................................................................................................ 16
References........................................................................................................................ 24
BKAL 3063 Integrated Case Study
0
CASE 3 : 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 company that was founded in
1983. The company starts their business under the name 'Long Distance Discount
Services ' (LDDS), providing long distance telecommunication services. The venture was profitable right from the start. In 1985, Bernie Ebbers became the company 's CEO. The company changes its name to WorldCom in 1995.
During the 1990’s, the company starts to grow through series of successful acquisition and merger.
Table of Contents
Introduction....................................................................................................................... 1
Question 1 .......................................................................................................................... 2
Question 2 .......................................................................................................................... 4
Question 3 .......................................................................................................................... 6
Question 4 ........................................................................................................................ 10
Question 5 ........................................................................................................................ 16
References........................................................................................................................ 24
BKAL 3063 Integrated Case Study
0
CASE 3 : 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 company that was founded in
1983. The company starts their business under the name 'Long Distance Discount
Services ' (LDDS), providing long distance telecommunication services. The venture was profitable right from the start. In 1985, Bernie Ebbers became the company 's CEO. The company changes its name to WorldCom in 1995.
During the 1990’s, the company starts to grow through series of successful acquisition and merger.
References: ATLAS, S. R. (2002, July 22). WORLDCOM 'S COLLAPSE: THE OVERVIEW; WORLDCOM FILES FOR BANKRUPTCY; LARGEST U.S litigation & Regulation: Fuel to the fire: Whistle-blower incentives in the Dodd-Frank Act, Publication of Thomson Reuters: Westlaw Journal (August, 2010). Manual G Velasquez (2012), Business Ethics: Concepts and Cases 7th Edition, A Pearson publication, chapter 1: basic principles ethics in business, pages 56-61. The Associated press, “Ex-WorldCom Accountant Gets Prison Term”, The New York Times publication (August 6, 2005):