WorldCom took the telecom industry by storm when it began a frenzy of acquisitions in the 1990s. The low margins that the industry was accustomed to weren't 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
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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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distance discount service (LLS) after the breakup of AT & T . (Reuters and Washington post, March 2005) The company problems started with hiring Bernie Ebbers who was an investor but had no experience at all in management. I consider him a “jack of all trades” with all the odd jobs he held. Bernie lacked technology skills (Kaplan & Kiron, 2007). Ebbers took less than a year to make the company profitable. In 1997 WorldCom started to acquire many other telecommunication companies to become the fourth
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FRAUD AT WORLDCOM LDDS began operations in 1984 offering services to local retail and commercial customers in he southern states. It was initially a loss making enterprise, and thus hired Bernie J. (Bernie) Ebbers to run things. It took him less than a year to make the comoany profitable. By the end of 1993, LDDS was the fourth largest long distance carrier in the United States. After a shareholder vote in May 1995, the company officially came to be known as Worldcom. Corporate Culture Worldcom
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Review of Accounting Ethics ACC557 Financial Accounting Ethics in Accounting and the Fall of WorldCom In 2002, WorldCom was the second largest telecommunications company in the United States, but because of management failures and an unethical accounting culture it went bankrupt. This paper contains a discussion describing corporate ethics currently used in business; WorldCom's background, and the ethical breach; how WorldCom's ethical issue was discovered, describing how management failed
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Ethics in Accounting and the Fall of WorldCom Alison Painter Breeden Juanita S. Edwards, CPA ACC 557: Financial Accounting 23 January 2013 Ethics in Accounting and the Fall of WorldCom In 2002, WorldCom was the second largest telecommunications company in the United States, but because of management failures and an unethical accounting culture it went bankrupt. This paper contains a discussion describing corporate ethics currently used in business; WorldCom's background, and the ethical
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FRAUD AT WORLDCOM LDDS began operations in 1984 offering services to local retail and commercial customers in he southern states. It was initially a loss making enterprise, and thus hired Bernie J. (Bernie) Ebbers to run things. It took him less than a year to make the comoany profitable. By the end of 1993, LDDS was the fourth largest long distance carrier in the United States. After a shareholder vote in May 1995, the company officially came to be known as Worldcom. Corporate Culture Worldcom
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Mohd Sanusi 216516 4. Peggy Liaw Wan Gene 216388 5. Willson Wong 216381 1.0 EXECUTIVE SUMMARY WorldCom was a telecommunications company and formerly known as Long Distance Discount Services (LDDS). The company was handled by Bernard J. (Bernie) Ebbers, one of the original nine investors, and managed to gain profit within one year of management. In order to maintain 42% of Expense-to-Revenue Ratio, David Myers (controller) asked Timothy Schneberger (director of international fixed costs) to
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(Wells, 2011, p. 292). The History of WorldCom “WorldCom began in Mississippi as a small provider of long distance telephone services” (Lyke, 2002). However, due to deregulation in the telephone industry as well as aggressive leadership by CEO Bernie Ebbers, the company quickly grew due to many acquisitions and mergers in the 1990’s. This decade was a thrilling time of growth, high expectations, and technological advances. Industries in the telecomm industry were excited by the expectation of high
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management to run an unchecked organization, allowing them to use tricky accounting to manipulate the numbers to meet their expectations. Bernie Ebbers (CEO) used the aggressive acquisitions to boost earnings, which were hastily done with overvaluing the acquired company. The improper valuation increased the company’s debt and decreased the revenue. Further, Ebbers borrowed millions of dollars from WorldCom as a personal loan and used his stock as collateral. What’s worse, Scott Sullivan (CFO) inflated
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