Week 2 Eth 376
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. In the financial statements determined that the auditor was right about that the corporation was making false transactions that could not be determined what or how they go the amounts from. From the investigation that the auditors discovered $11 billion dollars that was fraudulent transactions.
The activities that took place was when there was an entry of $500 million dollars and there was no backup where it came from or no documentation that was found. This started the downfall for WorldCom. Cynthia Copper. Which is the vice president of internal audit for WorldCom, Gene Morse also a WorldCom employee discovered $3.8 billion in expenses that were allocated incorrectly on WorldCom’s financial statements. This is what made Cooper and Morse to suspect that the multi-million dollar corporation was falsifying the financial statements. Securities and Exchange Commission filed a civil action yesterday in federal district court in New York charging major global communications provider WorldCom, Inc. with a massive accounting fraud totaling more than $3.8 billion. The Commission's complaint alleges that WorldCom fraudulently overstated its income before income taxes and minority interests by approximately $3.055 billion in 2001 and $797 million during the first quarter of 2002.
Reference
US Securities and Exchange Commission Complaints filed (June 27, 2002)
The activities that took place was when there was an entry of $500 million dollars and there was no backup where it came from or no documentation that was found. This started the downfall for WorldCom. Cynthia Copper. Which is the vice president of internal audit for WorldCom, Gene Morse also a WorldCom employee discovered $3.8 billion in expenses that were allocated incorrectly on WorldCom’s financial statements. This is what made Cooper and Morse to suspect that the multi-million dollar corporation was falsifying the financial statements. Securities and Exchange Commission filed a civil action yesterday in federal district court in New York charging major global communications provider WorldCom, Inc. with a massive accounting fraud totaling more than $3.8 billion. The Commission's complaint alleges that WorldCom fraudulently overstated its income before income taxes and minority interests by approximately $3.055 billion in 2001 and $797 million during the first quarter of 2002.
Reference
US Securities and Exchange Commission Complaints filed (June 27, 2002)