THE NATION’S NEWSPAPER BS2003-01a Collegiate Case Study Enron law firm called accounting practices 'creative' By Greg Farrell www.usatodaycollege.com Accounting fraud Part I: The problems “Creative accounting” is not a new technique, but it can certainly be a costly one. Businesses feel the pressure to appear profitable in order to attract investors and resources, but deceptive or fraudulent accounting practices often lead to drastic consequences. Are these so-called creative practices
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Ethics in Management Accounting What are ethics? According to the Merriam-Webster dictionary, ethics are defined as, “Rules or behavior based on ideas about what is morally good and bad.” Ethics are rooted in an individual or an entire group’s moral values that govern daily behavior and crucial decisions. From a professional perspective, ethics provide a given quality and ensures a fair practice. In terms of business, it is the moral duties and obligations that apply to various professions and their
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FROM GREAT TO GHASTLY: HOW TOXIC ORGANIZATIONAL CULTURES POISON COMPANIES THE RISE AND FALL OF ENRON, WORLDCOM, HEALTHSOUTH, AND TYCO INTERNATIONAL David R. Lease, Norwich University Abstract This paper presents an analytical and comparative study of four recent corporate scandals involving organizations that had previously been recognized as both ethically and organizationally sound. Based on these case studies, the following issues are discussed: (1) The role of leader behavior and organizational/leadership
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such as falsifying profit reports. Standards for all manner of businesses from the small store to the international multi-million dollar industry are getting higher and frankly, this is a change that, in light of catastrophes like the collapse of WorldCom, was a long time coming. Introducing the reality of auditing standards mostly, auditors only bother paying attention to transactions that appear to be out of the norm (Glater, 2002). The tedious run of the mill activities of a business do not
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WorldCom where being talked by lamplight and bundling as Enron is a lot of in topic of accounting fraud. However, the volume of information that can be obtained in Japanese is far less compared with Enron. The fact relevance makes the description of the case a base. WorldCom is a huge telecommunication company that exists in the United States before. The company that Mr. Bernard Ebbers founded in 1983 accomplishes the rapid growth repeating M&A with tremendous force. Long-distance telecom carrier
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organizations can now learn from the mistakes of others. This paper will discuss the mistakes that lead WorldCom, a telecom company that was once the fourth-ranked in Fortune 500, to bankruptcy in 2002, in an effort to demonstrate the importance of successful risk assessment and alignment implementation. Keywords: corporate failure, risk analysis, risk assessment, risk management, WorldCom Over the past years, and as a result of high profile firm failures, the economic crisis, and increased
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Worldcom Fraud Investigation Use the Fraud Triangle and Fraud Scale to critically analyse the actions of Bernie Ebbers and Scott Sullivan during the WorldCom saga/ What does your analysis suggest? Dennis Greer’s fraud triangle is a key framework in analysing the ‘factors that cause someone to commit occupational fraud’ (ACFE-The Fraud Triangle, Association of Certified Fraud, Examiners Available from:http://www.acfe.com/fraud-triangle.aspx [January 2014]). The three elements that
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Assignment #1: WorldCom (Due Date: Monday, September 14) Bernard “Bernie” Ebbers and other founders started Long Distance Discount Service, a small Mississippi reseller of long-distance service. LDDS changed its name to WorldCom Inc., with Ebbers as CEO. WorldCom provides a broad range of communications services to both US and non-US based business and consumers. The company’s core business is communications services, which include voice, data, Internet and international services. WorldCom Stock peaked
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enough for Bernie Ebbers, CEO of WorldCom. From 1995 until 2000, WorldCom purchased over sixty other telecom firms. In 1997 it bought MCI for $37 billion. WorldCom moved into Internet and data communications, handling 50 percent of all United States Internet traffic and 50 percent of all e-mails worldwide. By 2001, WorldCom owned one-third of all data cables in the United States. In addition, they were the second-largest long distance carrier in 1998 and 2002. How the Fraud Happened So what happened
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Coulter, 2012, p. 165). In the case of Worldcom, it is clear that the organizational culture was heavily impaired and nearly non-existent. The company did not have a formal statement of values or ethical rules it expected its employees to abide by. This is the underlying issue that eventually led to the demise and bankruptcy of Worldcom. As a leader, you are expected to lead by example and set your organization up for long term success. When CEO of Worldcom, Bernard Ebbers, was told about an internal
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