accumulated around $41 billion in debt (Romar 2006). By the time it declared bankruptcy in 2002, the organization’s growth strategy through acquisitions, its loans to senior executives, and poor corporate governance contributed to the fall of the company. Through a series of fraudulent activities and unethical behavior, the company fell from a leader in the telecommunications industry to a company filing for bankruptcy. WorldCom’s financial executives used fraudulent accounting methods to present
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CASE 4: ACCOUNTING FRAUD AT WORLDCOM Betty Vinson: victim or villain? Should criminal fraud charges have been brought to her? How should employees react when ordered by their employer to do something they do not believe in or feel uncomfortable doing? In discussing whether Vinson should been charged with criminal fraud, it can be analyzed from ethical perspective which can truly judge whether she was morally responsible for the wrong or not. In order to determine whether Vinson was morally responsible
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integrity” (Carson, 2003, p. 390). Bernie Ebbers, CEO of WorldCom, business executive, and convict, is known to be one of United States most unethical leaders in history. He was convicted on March 15, 2005 on nine counts of conspiracy, securities fraud and making false regulatory filings. WorldCom was 2nd in the nation’s largest long distance telecommunications company, however the company was red flagged when a series of rapid acquisitions took place. The company was founded in 1995 and by 2000
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Running head: Internal Fraud Internal Fraud Jennifer England Strayer University Accounting Capstone – ACC 499 Professor Grant A. Wills August 3, 2011 Internal Fraud Infosys Limited is an IT and consulting company, it defines, designs and delivers technology-enabled solutions for Global 2000 companies. Infosys provides business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent
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Running Head: Is Ethics The Main Reason For Accounting Scandals? Is Ethics The Most Important Reason Behind Years of Accounting Scandals? Joshua A. Williams DeVry University Is Ethics The Main Reason For Accounting Scandals? Ethics: Is It The Most Important Reason Behind Years of Accounting Scandals? Ethics is a term that refers to a code or moral system that provides criteria for evaluating right and wrong (Spiceland, Spe, Tomassini, 2007). An ethical dilemma is a situation in which
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of stock in WorldCom and felt like they had to loan Ebbers the money or risk losing their own personal worth. Of course what was later determined was that Ebbers had built the incredible growth of WorldCom on a fraud, like he did with his own personal wealth. When confronted with the fraud Ebbers resigned, although some say he was
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* The fraud was accomplished primarily in two ways: * Underreporting which is interconnection expenses with other telecommunication companies by capitalising these costs on the balance sheet rather than properly expensing them. * Inflating revenues with bogus accounting entries from "corporate unallocated revenue accounts".` * In 2002, a small team of internal auditors at WorldCom worked together, often at night and in secret, to investigate and found out $3.8 billion in fraud. Shortly
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1. What does forensic mean? From Latin forensis ‘in open court, public,’ - Relating to, used in, or appropriate for courts of law or for public discussion or argumentation. - Of, relating to, or used in debate or argument; rhetorical. - Relating to the use of science or technology in the investigation and establishment of facts or evidence in a court of law: a forensic laboratory. http://www.thefreedictionary.com/forensic 2. Define forensic accounting. Forensic accounting is a type
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failed and was forced into bankruptcy. WorldCom was America’s second-largest long-distance telephone company and was the largest mover of internet traffic. The company started as a small-town Mississippi company that behemoth more than sixty acquisitions in the span of fifteen years (Trans). WorldCom managed to commit the largest accounting FRAUD in history. Bernard Ebbers, WorldCom’s CEO, 63 years old, was convicted of orchestrating this 11 million dollar accounting FRAUD and was sentenced to 25 years
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began to fall. WorldCom executives began to feel tremendous pressure to maintain their stellar track record of financial performance and to meet Wall Street’s expectations. This leads to one of the largest accounting fraud in US history between 1999 and 2002. The driving factor for his fraud was the business strategy of WorldCom's CEO, Bernie Ebbers. Ebbers was clearly focused on achieving impressive growth through acquisitions. However, once WorldCom acquired the new companies, it was not easy to properly
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