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
Words: 1137 - Pages: 5
Shiqi Wang ACCT 4456 Professor Steve Jensen September 22, 2015 WorldCom Case Analysis According to the section 301.4 of Sarbanes-Oxley Act of 2002, each audit committee shall establish procedures for complaints regarding accounting, internal accounting control, and auditing matters, and the anonymous complaints regarding questionable accounting or auditing matters. However, in this case, the WorldCom Company did not have the procedures for anonymous complaints, so Cynthia Cooper decided to
Words: 967 - Pages: 4
BKAL3063 Integrated Case Study Group I A141 30 September 2014 Group Members: 1. Rose Atikahanum Binti Abdul Rahman 216666 2. Nor Amira Zuriyanti Binti Khalid 216410 3. Nurulnabila Binti 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
Words: 2956 - Pages: 12
[pic] WorldCom Case Study FINC 621, Summer 2015 by Hailun Cao Mohammed Altuwaijri Papamagatte Diagne Qian Dou David Ballantine Yanchao Wu Strategic Analysis – Hailun Cao Bernie Ebbers, the chief executive officer, focused on acquisition business strategy. Major Acquisitions includes Advanced Telecommunications Corporation, IDB Communications group, Metromedia Communications Corporation and Resurgens, and Williams Telecommunications group (WilTel)
Words: 4227 - Pages: 17
WorldCom Case Study The problems with WorldCom are the lack of internal control, disordered corporate culture, management failure and the fraud accounting practices. In this case, the EBITDA has been largely exaggerated. A $3.8 billion EBITDA overstatement became WorldCom’s accounting shame. For companies, EBITDA is a way to measure the results of operations excluding the effect of interest, corporate income taxes, depreciation and amortization of long-term assets. It provides a way to compare
Words: 344 - Pages: 2
Answer no 1 (a): How senior managers at WorldCom managed earnings: Senior manager of WorldCom (CFO, Scott Sullivan) has cooked up the earnings of the company by violating the two basic rule of accounting i.e. accrual and capitalization. They overstate the company pre-tax income by releasing the accrual balance to the income statement and by capitalizing the operating expenses in the books (Dick Thornburgh, 2004). As per the GAAP (generally accepted accounting principles), a company should required
Words: 1856 - Pages: 8
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
Words: 1267 - Pages: 6
buying dozens of other companies. It eventually became WorldCom. The company grew rapidly in the 1990s. Among the companies that were bought or merged with WorldCom were Advanced Communications Corp. (1992), Metromedia Communication Corp. (1993), Resurgens Communications Group (1993), IDB Communications Group Inc. (1994), Williams Technology Group, Inc. (1995), and MFS Communications Company (1996), and MCI in 1998. On November 4, 1997, WorldCom and MCI Communications (the second biggest U.S. long-distance
Words: 703 - Pages: 3
Ethics Assignment: Worldcom case Introduction: On 21 July 2002, WorldCom, Inc., the then-second largest telecommunications company in the U.S. filed bankruptcy protection. Its failure was due to its executives’ bad business behaviors to manipulate earnings with improper accounting entries. The key persons involved in the fraud were as follows; CEO Bernard Ebbers, CFO Scott Sullivan, the accountants were Bufford Yates (Director of General Accounting), David Meyers (Controller), Troy Norman (Director
Words: 664 - Pages: 3
CASE PAPER: Enron, WorldCom, Tyco Enron, 2001 Enron, a Houston-based energy trading company, was the seventh largest company in the U.S before it filed for bankruptcy in 2001. It employed over 25,000 people, and paid its tops executives a sum of $1.4 billion in 2000. According to Fortune magazine, it was one of the “most admired companies” in the U.S. at the time. The reason Enron was so successful was that it kept hundreds of millions worth of debt off its books through the use of some unethical
Words: 538 - Pages: 3
