Based on my reading and research, I think the wrong business model of WorldCom is the key reason that caused this fraud. As a telecommunications company, providing service is supposing to be the main way for WorldCom to get their revenue. But they had a much better performance after they did the acquisition each time; because of they are not a very big company. They kept doing the acquisition because they found out that if they stop doing this, their performance will not be good enough for the
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major supplier of solar and wind renewable energy worldwide, managed the largest portfolio of natural gas-related risk management contracts in the world, and was one of the world's biggest independent oil and gas exploration companies. The Enron scandal involves both illegal and unethical activity and the courts of law will determine the precise extent of civil and criminal liability that accrues to the perpetrators (Verschoor 2002; Fusaro and Miller 2002). People commit fraud, for instance, for
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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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Journal of Economic Perspectives—Volume 17, Number 2—Spring 2003—Pages 3–26 The Fall of Enron Paul M. Healy and Krishna G. Palepu F rom the start of the 1990s until year-end 1998, Enron’s stock rose by 311 percent, only modestly higher than the rate of growth in the Standard & Poor’s 500. But then the stock soared. It increased by 56 percent in 1999 and a further 87 percent in 2000, compared to a 20 percent increase and a 10 percent decline for the index during the same years. By December
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Only months before Enron Corp.’s bankruptcy filing in December 2001, the firm was widely regarded as one of the most innovative, fastest growing, and best managed businesses in the United States. With the swift collapse, shareholders, including thousands of Enron workers who held company stock in their 401(k) retirement accounts, lost tens of billions of dollars. Investigations of wrongdoing may take years to conclude, but Enron’s failure already raises financial oversight issues with wider
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Unit 3 Research Paper # 1 Business Law Outline Thesis--Government Regulation is needed in the U.S. to keep scandals from ruining our businesses livelihood and the financial futures of all Americans. Introduction Many acts have been created because of controversy and scandals that have and continue to happen in the U.S. These acts were introduced to prevent individuals and businesses from losing everything and to help the government to keep individuals and businesses safe from scams
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Corruption is Vampirism For centuries, vampires have always been the symbol of corruption. It has been said and illustrated by many in books and essays that corruption is extremely similar to vampirism. It starts off with just one and it then multiples like cancer, dominating the society. Once corruption starts, it spreads so quickly that it is as though it is impossible to stop it. In Salem’s Lot, King uses vampires coming into the town to symbolize its destruction due to the corruption within
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This paper will address and analyze the different ethical issues and the questionable accounting practices that occurred to one of the largest accounting firms in the United States. We will look and review the mandated requirements for legal compliance (from Chapter 4) and determine which requirements apply to the Arthur Anderson case. Then we will discuss how the issues with the Arthur Anderson case may have played out differently if the Sarbanes-Oxley Act had been enacted in 1999. Next we will
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Misreporting of financial results have occurred in companies from various countries, such as personal computer maker Dell intentionally revised its results from 2003 to 2006 and in the first quarter of 2007. In 2006, the Malaysian express freight and freighter charter company Transmile Group restated its 2005 profit of RM75 million to a loss of RM370 million as a result of fictitious sales. This essay will analyse the incentives of companies misreporting their financial results in relation to how
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Accounting scandals CEO Bernard Ebbers became very wealthy from the rising price of his holdings in WorldCom common stock. However, in the year 2000, the telecommunications industry entered a downturn and WorldCom’s aggressive growth strategy suffered a serious setback when it was forced by the US Justice Department to abandon its proposed merger with Sprint in mid 2000. By that time, WorldCom’s stock was declining and Ebbers came under increasing pressure from banks to cover margin calls on his
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