executives and managers of WorldCom to "cook the books." Acquisition of other companies drove WorldCom to spend beyond their means; managers were told to spend whatever was necessary to increase revenue‚ even if it meant that long-term costs would outweigh the short-term gains. This fiscally unhealthy mentality led to a very bad decision to enter into long-term fixed rate leases for network capacity with extensive punitive termination provisions. Once the market for WorldCom ’s services started to cool
Premium Fraud Audit External auditor
WorldCom was born in 1983 with the name LDDS (Long-Distance Discount Service) in Clinton‚ Mississippi. In 1985 Early investor Bernard Ebbers becomes chief executive officers (CEO) of LDDS. The company became public in August 1983 with the acquisition of Advantage Companies Inc. In 1993 LDDS acquired long distance providers Resurgens Communications Group and Metromedia Communications in a three-way stock and cash transaction that created the fourth-largest long distance network in the United States
Premium
AUDIT FAILURE OF WORLDCOM Group 1 Background • WorldCom‚ first named LDDS (Long Distance Discount Services)‚ grew largely by aggressively acquiring other telecommunications companies in 1990s. • For a time‚ it was the United State’s second largest long distance phone company (after AT&T). Background However‚ the year 2002 comes… • In March‚ the SEC began to investigate WorldCom as it reported large profit while AT&T reported loss. • In May‚ Arthur Anderson was replaced by KPMG
Premium Auditing Internal control Audit
employees. Training can help to educate‚ raise awareness‚ and increase short and long-term company profits. WorldCom was a classic example of failed corporate governance‚ accounting abuses‚ and plain greed that could have been prevented through appropriate management and employee training. This paper will provide an example of a training plan that could have helped prevent the demise of WorldCom. Developing a Training Plan To increase the effectiveness of employees toward the achievement
Premium Management Ethics
WorldCom Critical Thinking Case Study Not only did WorldCom’s organizational culture contributed to the accounting breaches‚ in my opinion it was the catalyst to its ultimate demise in July 2002. Richard Thornburgh stated that “WorldCom could not have failed as a result of the actions of a limited number of individuals. Rather‚ there was a broad breakdown of the system of internal controls‚ corporate governance and individual responsibility‚ all of which worked together to create a culture in
Premium Ethics Corporate governance Fraud
would risk arbitragers take in this deal? How would their positions change if the board appears to favour Quest offer? 4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias‚ should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did their shareholders benefit? 5. Which offer should MCI accept? Why? 6. What approach should Verizon take to win takeover
Premium Stock Corporate finance Hedge fund
accounting entries. Assets were inflated‚ sales numbers were inflated and huge debts were omitted from balance sheets. Another company that used accounting to put out fraudulent financial statements was Worldcom. Being the largest accounting scandal in American History at the time of its exposure‚ the Worldcom scandal cost 30‚000 workers their jobs and investors over $180 billion.
Premium Enron Accounting scandals Fraud
used inappropriate accounting practices‚ the results of their deceptions and the government’s plan to avoid future incidents. WorldCom scandal brings subpoenas‚ condmnation By Andrew Backover and Thor Vladmanis Andersen’s partners chart firm’s future today By Greg Farrell Client-starved Arthur Andersen cuts 7‚000 jobs By Greg Farrell Dominoes hit WorldCom partners‚ clients By Michelle Kessler Adelphia plans to file Chapter 11 Cable firm expected to seek bankruptcy protection today
Premium Accounting scandals Arthur Andersen
to take you inside the doors of what was once the one of largest telecommunication companies in the world‚ WorldCom and tell the story of how an 11$ billion dollar accounting fraud led to one of the largest bankruptcy filings in history. In the two years before WorldCom declared bankruptcy‚ one man at the helm of the company told lie after lie about the true financial condition of WorldCom‚ lies that artificially inflated his own stock holdings and lies that deprived the common investors of information
Premium Fraud
2.1 -------------- 1. The business conduct that led to the WorldCom and Enron scandals was unethical‚ but not all of the behavior was illegal. Please discuss why Boatright explains in the Why the Law is Not Enough section of our text‚ “reliance on the law alone is a prescription for disaster.” (2012‚ p. 10) -------------- Reliance on the law‚ alone‚ is a prescription for disaster. This is true for several reasons. For starters‚ the law is not always appropriate when it comes to helping regulate
Premium Ethics