majority of the video is an interview with Walt Pavlo of MCI Worldcom. He explains his case and the steps that lead him to take the actions that landed him in prison. While he is telling his story two gentalmen describe how Walt’s story relates to the world of auditing as a whole and what steps a company and auditors need to take to avoid cases of fraud. 1. What were the three major fraud factors that led Walt Pavlo to commit fraud at MCI Worldcom? * Meeting Analysts’ Expectations *
Premium Employment Ethics Internal control
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
“mega-deals” • Purchased over 60 firms in 2nd half of the 90’s • WorldCom moved into Internet and data traffic – Handled 50% of US Internet traffic Handled © –2003‚ 2005 by50% the of e-mails worldwide AICPA WorldCom’s Background (con’t) • Purchased MCI for $37 billion in 1997 – Not allowed to purchase Sprint in 2000 because of antitrust regulation. • In 1999 revenue growth halted; stock price dropped • By 2001 owned a third of the US data cables • Was U.S.’ 2nd largest long-distance operator in
Premium Fraud Expense Financial audit
WorldCom’s business success by promoting business practices that provide greater opportunity for a diverse supplier base." Throughout WorldCom’s lively years‚ it had great growth through the buying out of other telecommunication companies‚ such as MCI Communications‚ Tier 1 ISP UUNET‚ and had a major part of the internet backbone. On November 10‚ 1997‚ this powerful company announced their 37 billion dollar merger‚ making it the largest in US history. WorldCom had almost become the nation’s top
Premium Corporate governance Verizon Communications
previously mentioned‚ for many years‚ researchers have been studying the “gap” between the normal ageing process and the onset/early onset of Alzheimer’s Disease (AD). This “gap” has since become known as the intermediate stage‚ Mild Cognitive Impairment (MCI). The discovery of this intermediate stage is a relatively new topic which requires further research into certain areas. Some of these areas include: an agreed upon diagnostic criteria‚ the causes and the treatments. Without an agreed upon diagnostic
Premium Cognition Alzheimer's disease Psychology
Introduction By June 2002‚ it had become evident to the SEC that WorldCom had engaged in a significant corporate accounting fraud scheme which had overstated pretax income by about $7 billion since 1999. At the time‚ this was the largest deliberate misstatement in US corporate history. Although there are many interesting elements and players involved with this incident‚ for the purpose of this case study I will focus on the role played by Betty Vinson‚ the Director of Management Reporting and
Premium Fraud Expense Accounting scandals
This paper will explain the fraudulent accounting practices that led to the collapse of Worldcom. Other objectives of this paper will be to demonstrate how these activities were able to go undetected. Also‚ what motives drove the individuals involved to commit these acts. And finally the ethical accounting issues involved. Worldcom got its start as a small discount long distance provider in Mississippi. Founded by Bernard Ebbers and a number of others the idea for Worldcom was simple‚ buy long
Premium Bond Fraud Corporate governance
The MCI’s source of funds has been emission of stocks. Common stocks as IPO of 6M shares and $27.070.000‚00. An issue of 9.600.000‚00 common stock 5 years warrant attached. What have been MCI sources of funds in the past (1972-1983)? What’s your opinion? Around 1972 MCI issued equity and later on time when the company started going well they issued debentures and convertible debentures. The main raison to do that is because equity cost use to be higher. First of all they issued debentures
Premium Bond Finance Corporate finance
Exhibit 1 Selected Pinkerton’s Financial Data (in $millions) 1983 1984 1985 1986 1987 (E) Income From Services Cost of Services provided Gross Profit Operating Expenses Operating Profit Cash Accounts receivable‚ net Other current assets Total Current Assets Net property‚ plant‚ and equipment Total Assets Accounts payable Accrued expenses ad other current Liabilities Total Current Liabilities Exhibit 2 $ 296 265 32 16 16 4 49 53 11 64 0 29 $ 308 275 32 17 15 3 51 54 11 65 1 29
Premium Generally Accepted Accounting Principles Balance sheet Asset
Case: Land Securities Group (A): Choosing Cost or Fair Value on Adoption of IFRS Case Number: 9-105-014 Topic: Financial Reporting and Control Description: A U.K. real estate firm‚ required to adopt international accounting standards (IAS) by 2005‚ must change the reporting of its primary asset (investment property) from the revaluation model under U.K. GAAP to either the cost or fair-value model under IAS. This would have a number of effects on European investment property firms‚ including
Premium Financial statements International Financial Reporting Standards Finance