US telecommunications giant‚ WorldCom during the 1990s that led to its eventual bankruptcy. The case provides a detailed description of the growth of WorldCom over the years through its policy of mergers and acquisitions. The case explains the nature of the US telecommunications market‚ highlighting the circumstances that put immense pressure on companies to project a healthy financial position at all times. The case provides an insight into the ways by which WorldCom manipulated its financial statements
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Enron’s Questionable Transactions 1. The special purpose entities (SPEs) got Enron into trouble. 2. It is debatable whether Enron’s directors knew how profits were being made through the SPEs. Speculation is that they did have knowledge‚ but did not question the questionable procedures. Evidence that indicates the directors knew how profits were being made includes the following: • Andrew Fastow’s role in establishing the SPEs and falsely creating 3% independent investors in
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On March15 2002 the former WorldCom chief “Bernie Ebbers” was sentenced to 25 years in prison for orchestrating an $11 billion fraud at the high-flying telecoms company which resulted in 17 thousand employees losing their jobs and witnessed the vaporization of there pension money so
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Arthur Andersen was in charge for the accounting records of several companies including Enron‚ WorldCom‚ and Waste Management. By early 2002‚ they had been charged of falsely auditing books for all three companies. The business revenue from these clients was more important than the ethical decision‚ so they managed to provide misleading information for several years. Waste Management‚ Enron and WorldCom all wanted to show higher profits to meet Wall Street expectations and therefore overstated cash
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Table of Contents Executive Summary 3 Introduction……………………………………………………………………………………………4 Agency Theory and Relevant Hypotheses 5 ABC Learning Centres Limited - Australia 7 Olympus Corporation - Japan ……………………………………………………………………..10 WorldCom Incorporated - United States of America…………………………………………… 13 Conclusion 16 Reference List…………………………………………………………………………………….…17 Executive Summary “An analysis of corporate collapses” is a report that discusses the concept of Agency Theory
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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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(1993). Creative Financial Accounting. Prentice Hall International (UK) Limited. News‚ B. (2002). BBC News Business. Retrieved 2013‚ from news.bbc.co.uk: http://news.bbc.co.uk/2/hi/business/2080180.stm Robert Kaplan‚ H. B. (2005). Accounting Fraud at Worldcom. 3-9.
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Corporate Business World: Ethics and Morality Cyrece Scroggins BA 3200 – Business Ethics Professor Verleaish Jones January 17‚ 2014 Ethics and morals are a requirement in the corporate business world. Each day employees are faced with moral and ethical issues; and because they have their own individual set of morals‚ they behave differently. Many have formed a good understanding of the basics of ethics‚ leadership‚ morality and social responsibility; but most do not really understand
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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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