Number: SC09MBA10 G. Edward McCullough, M.A. March 25, 2010 Examining a Business Failure: WorldCom Why do businesses fail? Most business corporations experience company failure because of their lack of organizational leadership and unethical practices, which can consist of fraud, conspiracy, falsifying documents, and embezzlement. An example of a business failure is most recognized by the WorldCom (2002) bankruptcy scandal. Many organizational behavior (OB) theories as it relates to leadership
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support. It was noted that this was not out of the ordinary at WorldCom. In your opinion, was this a proper accounting practice? Explain. Normally at the end of each month, Worldcom would estimate the costs of using “Off-net” facilities and connections. Worldcom would accrue these liability estimates. Line cost accrual estimates were very difficult to estimate with precision, especially for international services. When Worldcom learned more about the applicable charges of these Off-net services-when
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Impact of Unethical Behavior Several key concepts of ethics in accounting and financial decision-making are trust, confidentiality, collaboration, and a code of ethics. Trust and confidentiality go hand-in-hand in business accounting because trust is essential if a company wants loyal customers. Confidentiality is also an integral aspect of financial dealings because privacy is often a concern for many companies and customers. Collaboration is another area of financial decision-making that is relevant
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Sarbanes Oxley: An Antidote To Executive Greed? | May2011 | “Today I sign the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt. This new law sends very clear messages that all concerned must heed. This law says to every dishonest corporate leader: you will be exposed and punished; the era of low standards and false profits is over; no boardroom in America is above or beyond the law”- George W. Bush | | INTRODUCTION Since the initial
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clearly depict its operations and finances with shareholders and analysts”. Wikipedia also mentions complex business models and unethical practices, including a modified balance sheet so that it portrayed a more favorable depiction of its performance. 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management, and Sunbeam audits: the public interest or something else? Cite examples that reveal this motivation. It sure
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critical analysis of the 2002 collapse of the WorldCom telecommunications empire as seen through the lens of deontological ethics. This analysis will be accomplished by defining deontological ethics and the Categorical Imperative (CI); by generally establishing what ethical problems were inherent in the WorldCom case; by evaluating the WorldCom model according to a deontological ethics; and finally by using Immanuel Kant’s construct of the CI to assess the WorldCom scenario. For the purposes of this limited
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paper we will attempt to define the importance of a the, Sarbanes-Oxley and Foreign Corrupt Practices Act. The Foreign Corrupt Practices Act is a United States federal law known primarily for two purposes, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery and government officials. The primary purpose of the Foreign Corrupt Practices Act (FCPA) was to prevent the bribery of foreign officials in order to obtain business
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Analysis of the WorldCom Internal Control Using the COSO Model The control environment 1. Integrity and ethical values Integrity and ethical values are the product of the entity’s ethical and behavioral standards, as well as how they are communicated and reinforced in practice. They include management’s actions to remove or reduce incentives and temptations that might prompt personnel to engage in dishonest, illegal, or unethical acts. They also include the communication of entity values and
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Accounting Fraud at WolrdCom Introduction WorldCom, US second largest telecommunication company shocked the world by filing bankruptcy at 21 July 2002. The WorldCom filing surpassed Enron and became the largest bankruptcy filing in United States history. Due to its rapid growth, WorldCom is also heavily in debt as they finance the company growth with debt. The collapse of WorldCom did not just affect their employees, retailers, the government but also bankers. WorldCom was a multi-billion dollar telecommunications
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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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