Corporate Transparency vs. Business Performance Throughout history‚ mankind has had innumerable moments of corruption and greed. From the City-State wars in ancient Greece to the organized crime during the prohibition‚ human beings have always been prey to the desires of wealth and power. While our current society may seem civilized compared to those eras‚ the shallow traits which haunted mankind then are still in play in today’s society. There are always going to be people looking for a way to
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Enron Questionable Transactions Question 1 The question which segment of its operations got Enron into difficulties is simple to answer‚ everything. Almost every all segments of their operation were improper. First of all‚ they practice unethical and dishonest practices which victimized workers‚ consumers‚ taxpayers and stockholders. Enron created partnerships within their own organization which led to them creating new financial instruments‚ called SPE’s (special purpose entities) which was
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Anderson’s audit partners. However unlikely‚ Arthur Anderson managed to push company boundaries and imploy tactics of a blind eye and a deaf ear within companies such as Enron‚ WorldCom‚ etc. With that being said‚ one should not fall under the impression that AA acted alone or solely arranged for these occurrences i.e. Enron and WorldCom bankruptcies to take place; clients were also at fault! According to Barbara Ley Toffler‚ “When Berardino (AA’s CEO) would get up at a partners meeting‚ all that was ever
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Inside the WorldCom Scam Title: Pointing the Finger Question: The corporate scandal involving WorldCom regrettably illustrates improper cost transfers designed to achieve higher profit levels. WorldCom did not transfer the cost from leases from the balance sheet to the income statement as quickly as they should have. This had the effect of overstating assets on the balance sheet and net income on the income statement. Please watch this section of American Greed: Inside the WorldCom Scam: http://www
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Which segment of its operations got Enron into difficulties? The fall of Eron has understandably generated significant interest in the professional literature as well as in the popular press. The activities and events underlying Enron’s collapse are manifold‚ but several stand out as particularly noteworthy. One is the use of special purpose entities (SPEs). Although SPEs often serve legitimate economic purposes and are still in use today‚ Enron used several of them to hide debt and to overstate
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Case 2-1 Cynthia Cooper and WorldCom Cynthia Cooper details her trials and tribulations about her experiences at WorldCom in the book Extraordinary Circumstances: The Journey of a Corporate Whistleblower. The following excerpts from the book describe the actions she took to uncover the fraud at WorldCom and reactions of key players in the accounting department‚ top management‚ the audit committee and the external auditors. Cooper was first alerted to the fact that there may have been a problem
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all material respects in accordance with a financial reporting framework” (Philomena Leung‚ 2011). Audit failings tie in with the WorldCom accounting scandal where the company was capitalizing its costs than making them expenses. This was deemed an audit failure because of audit procedures not been able to recognise the fraud. So why did so many companies like WorldCom
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that they can compare whether product of the company fit the requirement of consumer also whether the product is good for their health. 2. Using an example‚ explain what is meant by business ethics. Answer: A corporation in America‚ known as WorldCom was revealed a $3.8 billion accounting fraud. The company manipulated the financial statements by counting $3.8 billion as capital expenses which was actually spent on their everyday expenses which are treated differently in accounting literature
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Bernie Ebbers should have gone to jail. I disagree with the 25 year length of his sentence but he is at least partially to blame for the WorldCom fiasco. I think the government used the length of the sentence to prove a point and the only prior sentence comparable to this was John J. Rigas from Adelphia Communications earlier in the year . I think the CFO Scott Sullivan got a light sentence and consciously knew what he was doing and could have put a stop to it. He should have been the good advisor
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unethical) conduct of organization members. For example‚ Bernie Ebbers‚ the former chief executive officer of WorldCom‚ was hailed as a great leader for growing the company into a telecommunications superpower. 69 03-Kidwell.qxd 10/29/2004 10:23 AM Page 70 70——MANAGING ORGANIZATIONAL DEVIANCE Ebbers‚ however‚ was later discredited for his failure to provide moral leadership as WorldCom became engulfed in financial scandals that resulted in the largest bankruptcy in U.S. history (for more
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