fixed-rate leases for network capacity WorldCom initiated in order to meet the anticipated increase in customer demand. And as later the demand was not as expected‚ the Company has to pay for the leases that were substantially underutilized to avoid punitive termination provisions. The line costs that WorldCom capitalized were ongoing‚ operating expenses that accounting rules required WorldCom to recognize immediately. Instead of expense the cost currently‚ WorldCom capitalized it to exaggerate its pre-tax
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Business Ethics Doug Donofrio FIN/486 May 27‚ 2013 Mary Corcutt Eron and WorldCom are both companies that collapsed due to ethical violations. The major factors that lead to the dissolution of Enron Corporations and WorldCom will be indentified. The specific ethical violations in accounting practices at these two companies will be explained and the role of business ethics in strategic financial planning will be described. “Business Ethics are the standards of conduct or moral judgment that
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publically traded companies. Every week brought different news on misrepresentations at major American corporations and financial institutions. As soon as the report of accounting fraud at Enron reached public‚ media revealed similar scandals at WorldCom‚ Tyco and number of other publically traded companies. Improper revenue recognition‚ incorrectly recorded expenses‚ and other practices to manipulate financial statements along with briberies to auditors for covering the fraud caused the biggest
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users. In 2002‚ WorldCom a telecommunication company‚ filed for bankruptcy. It was later revealed that the company was involved with improper accounting in two major forms. First WorldCom inflated revenues to increase profits‚ thereby increasing stock prices‚ and increasing the satisfaction of stakeholders. Second‚ the company understated line costs. Revenue is important to users of financial statements because it helps them evaluate a company’s performance and prospects. WorldCom violated the revenue
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Devon Daniel Verizon Verizon stars with WorldCom in 1983 when Murray Waldron and William Rector came together to sketch out a plan create a long-distance telephone service. Long Distance Discount service‚ became their new company that began operating as a long-distance reseller in 1984. The new company grew quickly in the next fifteen years‚ over time it change to WorldCom. The company became one of the largest telecommunications corporations in the world. They also became the largest bankruptcy
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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
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Auditing Theory and Practice Case 1 WorldCom: A Focus on Professional Responsibility Prepared by: EL Ahmadi Med Reda Worked With: Ibtihal Slassi Fall 2013 1- Auditor independence refers to the disinterest from the internal and external parties that could influence the professional judgment of an auditor. In other words‚ auditor independence is the lack of any interest that may create a threat or a risk of material bias regarding the reliability of the financial statement
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Levels of Planning Many times we think of planning as one function of management with no variety. Any time you are looking to the future you are just planning. Throughout this week ’s readings‚ the class has learned that there are actually four levels of planning. These levels include: strategic‚ tactical‚ operational‚ and contingency planning. Each level has a different purpose and impact on the planning process. In the following paragraphs‚ we are going to describe three of the four levels of
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Analysis of each company and provides recommendations for investors. Introduction This report will look at: • The unethical behaviour about WorldCom accounting scandal • The Monopolistic competition about china telecom • The overcharging behaviour of AT&T • Recommendations for telecommunication industry • Conclusion Findings WorldCom WorldCom‚ The America’s second-biggest long distance phone company. From 1999 to 2002‚ an internal audit had reported that $3.3 billion in profits were
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HealthSouth Fraud Investigation Table of Contents Table of Contents i Introduction and Background 1 Analysis 1 Why it occurred 2 Fraud Triangle 2 How it occurred 3 Red Flags of the Fraud 5 Why the Fraud Continued Undetected 6 The Auditors Roles and Responsibilities 7 Fate of Parties Involved 8 Effect of Fraud on HealthSouth 9 Conclusion 10 Appendix A 11 Appendix B 12 Appendix C 13 Appendix D 14 Appendix E 15 Appendix F 16 Works Cited 17 Introduction and
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