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
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WorldCom was the second largest telecommunications corporation in the United States. After thriving in a multi-million dollar business they were forced to close their doors. The reason were practices unethical and fraudulent activities which lead to exposing the business. WorldCom was one of the largest accounting fraud scandals in corporate history. WorldCom had to file for bankruptcy after the organization admitted to accounting fraud. How this came up was a long and drawn out investigation
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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
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Introduction Jeffrey Seglin‚ a business ethics columnist for the New York Times‚ participated in an event sponsored by Markkula Center for Applied Ethics. He described two Wal-Marts…one as evil and one as good. The evil company is very‚ very big and does everything to grow bigger. They use illegal immigrants to mop floors and are accused of locking employees inside overnight. They practice gender discrimination‚ pay low wages and deteriorate suppliers and competition. The bad one “is the enemy
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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
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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
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Lessons of Tyco: Just Say No OCTOBER 6‚ 2008 FORMER GENERAL COUNSEL TO REAGAN‚ TYCO DISCUSSES ETHICS AT VLS [pic] William B. Lytton speaking in the Chase Center at Vermont Law School. William B. Lytton remembers the aura of working in the White House in 1987‚ amidst the power and the personalities that surrounded President Ronald Reagan. Lytton had taken leave from his Philadelphia law firm for six months to act as Deputy Special Counselor for Reagan during the Iran-Contra investigation
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Running head: CASE ANALYSIS OF THE ACCOUNTING FRAUD AT WORLDCOM Case Analysis of the Accounting Fraud at WorldCom Angela Crossley Troy University October 27‚ 2008 History The origin of WorldCom can be traced back to 1983. The CEO‚ Bernard J. Ebbers‚ of WorldCom had very interesting beginnings. He invested in Long Distance Discount Services (LLDS) with eight other investors‚ and believed that the telecommunications industry was a very good business venture. In the beginning
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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
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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.
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