Worldcom Essay

WorldCom, second to AT&T, was the largest long distance telephone, Telecommunication Company, in the domestic United States in the 1900’s. 1993 WorldCom began business as Long Distance Discount Services, Inc. (LDDS) based in Jackson, Mississippi, relocating in 1985 to Clinton, Mississippi. WorldCom’s significant growth, specifically the result of aggressive strategies, acquiring additional communication companies. For example, vital to internet communications at the time, the most publicized acquisition was that of MCI Communications, where headquarters was relocated to Virginia. Mergers and acquisitions continued throughout the 1990’s, establishing advancement of the company as the largest handler of internet data, for online services.…

2002. This was the largest bankruptcy in the United States history at that time. WorldCom filed bankruptcy as a result of, accounting errors that totaled over $7 billion, which led to its demise. The demise of WorldCom had profound effects on an entire industry. However, between July 2002 when they filed bankruptcy and April 2004 when they began to reestablish the company as MCI, the new CEO Michael Capellas and the newly appointed CFO Robert Blakely still has a problem of trying to settle…

The motivating factor behind this fraud was the business tactic of WorldCom's CEO, Bernie Ebbers. During1990s, Ebbers was only focused on achieving an extraordinary growth through acquisitions. By using the stock of WorldCom he was going to pay for the acquisitions. To achieve this buying extravaganza, the stock had to repeatedly increase in value. In 1998, WorldCom acquired MCI Communications, a company which was more than 2.5 times the profits of WorldCom. Ebbers' acquisition strategy mainly…

the American telecommunications company that was originally formed as a result of the merger of WorldCom. Currently, MCI, Inc. is headquartered in Ashburn, Virginia but originally WorldCom was headquartered in Clinton, Mississippi (Reardon, 2006). WorldCom’s growing success through acquisitions of other telecommunications firms led it to become the second largest long distance telecommunications company in 2001. However, on June 21, 2002 the aspiring company filed for bankruptcy protection…

accounts were drawn down to boost earnings. However, when the reserve accounts eventually ran out of money, Scott Sullivan ordered the accounting staff to treat line costs, which should have been treated as expenses, as capital assets. This accounting treatment was against the Generally Accepted Accounting Principles, which should have been used by WorldCom’s accounting department. By classifying the line costs as capital expenditures instead of expenditures, WorldCom was able to write off the…

Yes, both parties should be held accountable. The board of directors who ought to really screen the administrators, helping toward the organization; rather was much the same as leaving everything to the management itself to do whatever they feel is right. None of the outside directors had general correspondences with the top management or with other representative outside of board or council gatherings and preceding April 2002, they were never met without anyone else's input to talk about matter…

was also resistant to change at the time. He did not like to use e-mails to communicate with his employees. He also led his employees by telling them to do whatever off the top of his head without understanding the consequences. Another trap that the board has succumbed to is not being able to forecast future threats. In the third paragraph of the case study, it states that the avoidance of factoring in external problems lead to falsifying financial reports. Group thinking should be introduced…

On July 21, 2002, WorldCom, one of the nations leading companies in Telecommunications, filed for bankruptcy and exposed an $11-billion-dollar fraud, making it one of the largest in all time. Spearheading the scandal were six employees, Bernard Ebbers the CEO, Scott Sullivan the CFO, David Myers the accounting controller, Buddy Yates the Accounting Director, and Betty Vinson and Troy Norman the accountants. The scandal went to federal trial, and after six days of jury deliberation, all six of…

“Cynthia Cooper Blowing Whistle At WorldCom” Abstract An ethical behavior in the corporate world is paramount and every employee working in the organization has the right to blow the whistle in case of sensing fraudulent activity in the organization. At the interest of the stakeholders, it is very important every penny invested in the company is property taken care and has been optimally utilized towards fetching better returns in the organization. An…

I believe that the Sarbanes Oxley Act was effective in managing the risks exposed through Enron Corporation, Arthur Anderson, and WorldCom. Prior to the Sarbanes Oxley Act, CEOs and other executives gave themselves massive bonuses and profit from falsified financial reports (Ferrell, Fraedrich, & Ferrell, 2013). The Sarbanes Oxley Act was designed as a way for the federal government to keep an eye on the accounting practices of corporation and prevent future ethical misconduct. This law added…