affected by anyone‚ even though making false accounting entries was Mr. Sullivan’s behest. Despite other factors‚ as a financial controller‚ integrity should plays as one of the most vital roles under any circumstance when making decisions. In this case‚ I think the real motivation that Myers agreed to improperly reclassify some huge expenses was that he believed the company’s problem would be straightened out eventually. Thus‚ he thought their manipulation on company’s income statement could help
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Ayusarita Satriani 311368 – IUP BUSINESS UGM Financial Management ENRON Resources: http://en.wikipedia.org/wiki/Enron_scandal ; http://news.bbc.co.uk/2/hi/business/1780075.stm; http://finance.laws.com/enron-scandal-summary Enron is an energy company that successfully grew from nowhere to be America’s seventh largest company‚ which has 21‚000 staff in more than 40 countries in 15 years. It was one of the world’s leading electricity‚ natural gas‚ communications‚ and pulp and paper companies
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Corporate Governance WorldCom Scam Introduction MCI WorldCom was one of the largest telecommunications companies in the world. Bernie Ebbers founded WorldCom in 1983‚ after that WorldCom began as a re-seller of long-distance telephone services. WorldCom is located at Mississippi. After Ebbers bought around 50 other small long-distance firms‚ he set his sight on MCI. Thus MCI WorldCom would have become the second biggest telecom service provider in 1997. MCI WorldCom was formed on September-15-1998
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FAR600 CASE STUDY WORLDCOM QUESTION 1 a) Discuss the earnings management technique employed by the management of World Com. WorldCom admitted that the company had classified over $3.8 billion in payments for line costs as capital expenditures rather than current expenses. Line costs are what WorldCom pays other companies for using their communications networks; they consist principally of access fees and transport charges for messages for WorldCom customers. Reportedly‚ $3
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tools required to act ethically. When an individual is asked to do something that they may even suspect would be detrimental to their livelihood‚ then they have all the rights given to them to not follow through with that action. In the case of Betty Vinson of WorldCom‚ while she had the clear understanding that her actions were wrong‚ she clearly kept personal financial safety ahead of her moral and ethical standards. This eventually translated into an even more detrimental result‚ which was jail time
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WorldCom was one of the leading telecommunication companies prior to its application for bankruptcy protection on July 21st‚ 2002. The firm’s decision to file for bankruptcy was a shocker move considering the amount of revenues and asset base the company had. It is believed that the firm was highly involved in fraudulent bookkeeping between the year 1999 and 2000 where they had managed to overstate its taxable income by at least $7 billion. It was also revealed that the company had committed itself
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Enron and WorldCom FIN/486 December 22‚ 2014 Enron and WorldCom In 1998‚ Waste Management executives acknowledged earnings misstatements of approximately $1.7 billion. With the help of the Arthur Anderson accounting firm‚ Waste Management shareholders lost more than $6 billion dollars (CNN‚ 2001). The Waste Management corruption ushered in a series of corporate scandals into the new millennium. Enron and WorldCom were only two of many ethical and accounting violations that prompted new legislation
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fraudulent accounting practices that led to the collapse of Worldcom. Other objectives of this paper will be to demonstrate how these activities were able to go undetected. Also‚ what motives drove the individuals involved to commit these acts. And finally the ethical accounting issues involved. Worldcom got its start as a small discount long distance provider in Mississippi. Founded by Bernard Ebbers and a number of others the idea for Worldcom was simple‚ buy long distance services from larger companies
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capitalization of operating expenses • management promoted culture fixed on the numbers • board of directors’ failure to scrutinize billion-dollar acquisitions • excessive loans to executives in order protect stock prices Financial Overview of WorldCom (in Billions) Financial Highlights 1994 1999 2001 2004 Revenues $2.2 $37.1 $35.2 $20.7 Total Assets $3.4 $91.1 $103.9 $17.1 Employees $7.5 $97.6 $87.8 $40.4 Market Cap. $3.3 $150.5 $42.8 $6.4 Debt $0.8 $13.1 $30.0 $5.9 Total Capitalization
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M1. Case Study Assignment: Fraud at WorldCom 1. Who were the major characters in WorldCom? There are a couple of major characters that played their roles in the downfall of WorldCom. Mr. Bernard J. (Bernie) Ebbers‚ one of the founders of the original small long-distance carrier‚ was asked to take charge of the company during its early struggles. It was under his tenure that WorldCom began its expanding pursuits and aggressive acquisitions. Although Mr. Ebbers was he head of the company‚ their CFO
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