RUNNING: Demise of Enron Corporation® and WorldCom® Demise of Enron Corporation® and WorldCom® Your Name October 31st, 2012 FIN/486 Instructor Enron Corporation and WorldCom In the last decade, two powerful American companies, Enron Corporation and WorldCom, have become the models of accounting corporate fraud. The Enron Corporation was founded in 1985 by Kenneth Law in Omaha, Nebraska. The company later moved its operation to Houston Texas when InterNorth and Houston Natural Gas merged
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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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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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Unethical behaviors in the accounting field is extremely important to investors and stock holders. This is critical information will help determine their investment in the company and the amount of stock that they are going to purchase. Misleading financial funds in order to gain personal leverage, misuse of analysis, exaggerating revenue of assets, bribery and security fraud are just a few problems of unethical behavior. In 2002, Enron/Andersen and the Worldcom scandal were two companies that
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never arrived, and countless other unethical practices. Top executives at WorldCom were convicted for the corruption that finally bought the telecommunications company down. However, the exposure of WorldCom revealed weak internal controls and a lack of effective organ- izational structure and civility that seem to be present in other top companies. WorldCom organizational behavior theories could have predicted or even explain the failure of WorldCom . Additionally, I will offer perspectives
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Worldcom was founded as a long distance provider in Mississippi region. Later on, the company started acquiring small telecommunications firms what caused a robust increase leading to over thirty seven billion revenues. The year 1999 was marked by a huge slowdown in the internet and telecommunications industries. Wall Street market reacted to this unusual decrease immediately, so the stock prices began to fall. In order to keep the investments and prevent the fall of earnings, Worldcom began
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the 1990s, the telecommunication was rapidly growing which led WorldCom to adopt the strategy of purchasing small long distance firms with limited geographic service areas and consolidating carriers with large market shares. This was the company’s main key profit. Indeed, by adopting this strategy, WorldCom grew quickly by expanding internationally in South America, West America, Europe and Latin America. As a result of this, WorldCom became the leader in this industry. - The pressure that Ebbers
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Paper Management Planning Paper WorldCom or “MCI Inc.” (Presently) was a telecommunications company founded in 1983. The company began as Long Distance Discount Services, Inc. (LDDS) and was based out of the state of Mississippi. The company became publicly owned corporation by 1989 as a direct result of the merger between themselves and “Advantage Companies Inc”. It was at this time the company took on a new name (LDDS WorldCom). The primary function of WorldCom at the time was to provide long distance
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Ethics in Management Accounting What are ethics? According to the Merriam-Webster dictionary, ethics are defined as, “Rules or behavior based on ideas about what is morally good and bad.” Ethics are rooted in an individual or an entire group’s moral values that govern daily behavior and crucial decisions. From a professional perspective, ethics provide a given quality and ensures a fair practice. In terms of business, it is the moral duties and obligations that apply to various professions and their
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Organizational Behavior within WorldCom WorldCom entered the telecommunications market as LDDS in 1983, founded by Bernie Ebbers in Jackson, Mississippi. The company grew dramatically through numerous acquisitions and adapted the name “WorldCom” in 1995. In 1998, WorldCom purchased MCI, the nation’s number two long-distance provider, for $37 billion. WorldCom, considered a major success story of the 1990s, filed Chapter 11 bankruptcy in July 2002. With 65 successful acquisitions, including 11
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