Effects of Unethical Behavior ACC/291 One may describe accounting as a type of language or mechanism that provides information about the financial position of a company. The information provided in the financial statements of accounting is used by investors to determine whether or not to invest in an organization, and used by creditors to determine whether or not a loan should be granted. The mere fact that these financial statements are important and involves money opens doors for unethical practice
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Over time, many unethical accounting scandals existed. The WorldCom scandal is one of the most known unethical scandals. WorldCom submitted the largest bankruptcy filing in United States’ history after admitting improperly accounting for more than $3.8 billion dollars in expenses (Moberg, 2012). The company used acquisitions to spurt large growth. Two of WorldCom’s acquisitions included MCI Communications and MFS Communications (UUNet). This caused WorldCom to appear more favorable on Wall Street
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emerging in future quarters after an acquisition. WorldCom Corporation was known as the second largest telecommunications company in the world. It handled approximately 50 percent of Internet traffic in the United States and 50 percent of data communications worldwide (Obringer, n.d.). The growth strategy that was utilized by the corporation was the acquisition of other companies and mergers. Throughout the course of its operation, WorldCom successfully acquired a total of 65 companies while
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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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this world.” - Albert Camus Nobel Peace prizewinner, Albert Camus compared the actions of an unethical man equal to that of a beast. Following Mr. Camus’s assumptions leads one to question, are business leaders who act in an unethical manner considered beastly? How have unethical business leaders changed the way in which companies do business? All businesspersons that act in an unethical manner, regardless on the time era, eventually fail and the ramifications always affect society in
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transition of accounting practices and technologies. This was the case that WorldCom faced as they made major deals to acquire larger organizations. These organizations gave WorldCom a greater share of the market and strengthened their core competencies but larger does not necessarily equate to greater profitability. ("WorldCom: a failure," 2005) The behavior The top management of WorldCom had relationships that fostered unethical behavior for the organization. The practices of authorizing wealthy
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this discussion; Unethical behavior within organizations. Unethical behavior within organizations has been occurring for centuries and it is what led to their ultimate demise. Unethical behavior is the beginning of the end in some companies and in some of those it results in the ruin of what started out to be a good thing. Some of these companies started out as small prosperous businesses that later grew into large dominate organizations for example; Enron, and of course WorldCom. These businesses
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WorldCom Ethical Scandal In the late 1990’s, WorldCom was a successful company and leader in the telecommunications world. They had merged with MCI and the company was regarded for being innovative and growth hungry. However, in the midst of all the mergers WorldCom CEO Bernard Ebberly began to mismanage the company. WorldCom was no longer meeting their numbers and it looked like stock prices would fall. Rather than letting this happen, executives at WorldCom doctored the books. CFO Scott
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Running head: Review of Accounting Ethics 1 Review of Accounting Ethics Cynthia Harley Dr. Julie Hamm Acc 557 5/1/2014 Review of Accounting Ethics The WorldCom Scandal Vikalpa: The Journal For Decision Makers provides us with the following excerpt from WorldCom’s 2002 press release: CLINTON, Miss., June 25, 2002 –- WorldCom Inc. (Nasdaq: WCOM, MCIT) today announced that it intends to restate its financial statements for 2001 and the first quarter of 2002. As a result of an internal audit
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Solutiongo to problem WorldCom scandal was one of the biggest accounting scandals of American corporate history. WorldCom was a U.S based telecommunication company. The WorldCom accounting scandal was disclosed in 2002. The Company had resorted to fraudulent accounting practices for five quarters (four quarters of 2001 and the first quarter of 2002) (The WorldCom Accounting Scandal, 2002). The well-known telecommunication company WorldCom and the accounting, auditing and consultancy enterprise were
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