with a seamless 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
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represented positively, the accounting controls within were “virtually non-existent” . Even though Arthur Andersen acknowledged WorldCom as a “maximum risk” client and mentioned to the Committee that WorldCom had “misapplied GAAP (Generally Accepted Accounting Principles) with respect to certain investments,” the committee chose to ignore it and in the end Arthur Andersen gave WorldCom a clean, unqualified opinion The members
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May 6, 2013 Susan Paris Ethicality of Accounting Activities The WorldCom case shows an example of what unethical behavior is. Cynthia Cooper indicated the activities were fraudulent and describes the individuals involved. More than one department was to blame for the fraud at WorldCom. Cynthia Cooper with the help of Glyn Smith initiated the audit that led to the unethical activities within the company. WorldCom inflated their earnings to make the company look profitable. The expenses
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Provide one example of how WorldCom violated the revenue recognition principle in this situation. WorldCom violated the revenue recognition principle when they made “top-side adjusting journal entries, often very large, that were allegedly made during the quarterly closing process in order to hit revenue growth targets” to their monthly revenue report. WorldCom was making up entries consisting of revenue that they have yet to earn. This fraudulent practice allowed WorldCom to reach their double-digit
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ethical issues that occurred in the late 1990s and early 2000s, Enron Corporation and WorldCom. This paper will focus on the factors that led to the demise of the corporations, as well as the violations that occurred within the accounting practices, and the specific ethical violations in strategic financial planning. To summarize, the largest contributing factor to the demise of Enron Corporation and WorldCom was simply corporate governance failure (Stanford GSB Staff, 2016). The smaller factors
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Q1 a) The earnings (net income) are considered as the most critical financial figure in the financial statements as it indicates the profitability of the company. All benefits for shareholders including both the capital gains and dividends are closely related with the earnings. In other words, the performance of the company and the management can be largely evaluated by the earnings figure. Due to the importance of earnings, it is not surprising the management is keen to improve the figure via
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Name: University: Course: Date: ORGANIZATION OF WORLDCOM WorldCom is accredited as the United States giant in the world of business. The company started its operations under the name of Long Distance Discount Services Inc. (LDDS) back in 1983. Six years later, it merged with Advantage Companies Inc. thereby going public under the name of LDDS WorldCom. This was later transformed to WorldCom. The company experienced rapid growth through the 1990s and when it purchased
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: Análisis de un caso de Fraude Real 1. Prepare un resumen del caso de Fraude WorldCom es una empresa de telecomunicaciones, la segunda proveedora de servicios de información y llamadas telefónicas de larga distancia en EE.UU. La gigantesca compañía de telecomunicaciones tuvo que anunciar el 25 de junio del año 2002 que tendría que corregir sus cuentas de resultados en unos 3 850 millones de dólares. Ello, ocasionó que todos los stakeholders de la compañía, quedaran atónitos al darse cuenta
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Provide two (2) examples of companies that have been guilty of ethics-based malfeasance related to financial management and determine why their comeuppance was deserved. The two companies that I focus on in this section are Goldman Sachs company and WorldCom in the telecom world. Goldman Sachs was charged by the securities exchange commission, with fraud because the company developed and marketed an artificial collateralized debt system. Paulson & Co had the same invested and at stake with in the
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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 began with good intentions and ended up internally combusting. All of it was due to the result of GREED. Greed is a disease, and has plagued several organizational leaders over time and caused them to go against their good ethics
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