Research Paper Number One Nathan C. Fears, Student Kaplan University Abstract The perception of the financial and the accounting field over the past decade has been very poor in the eyes of the public. Especially after many recent scandals that have more then embarrassed the industry. The overall idea behind the field of accounting is for accountants to serve the public for the greater good. Yet the public doesn’t feel that accountants can be trusted. Hence
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is an overall assessment of the financial fraud that occurred at Worldcom. This paper will show that if an operational audit had been conducted how it could have uncovered the fraud at an earlier time. | Initial Survey and Engagement Development In the introduction survey there are several topics that should have been discussed in the initial survey and engagement development for an audit of Worldcom. When reading the Worldcom case the very first thing that I noticed was there was no written
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Regulations February 18, 2014 Introduction In recent years there has been many different regulations that have been put into effect to avoid any more accounting scandals. Some scandals that has gotten worldwide attention would be scandals such as WorldCom, Enron and Avon. These regulations have been put in place to help investors and to prevent companies from being put in situations where a scandal could arise. Companies need to pay close attention and follow the regulations or there can be stiff
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company earnings and filed for bankruptcy. This resulted in jail time and 78 counts of fraud for Andrew Fastow, CFO and 24 years in prison for prior CEO Jeff Skilling. WorldCom had a similar situation, as the expenses as a percentage of their total revenue increased because the growth rate of its earnings dropped. As a result, WorldCom reduced the money it held in reserve by $2.8 billion and moved this money into the revenue line of its financial
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filed. If the financial reports are discovered to be untrue, such acts of noncompliance are fines, imprisonment, or both, depending on the severity. The Act was designed for publicly traded companies only, in reaction to scandals such as Enron, WorldCom, and Tyco. These scandals cost investors billions of dollars when the companies collapsed, or the stocks plummeted. These companies altered or destroyed records, defrauded shareholders, or “cooked the books”. When a company cooks the books,
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FRAUDS? | NOTABLE FRAUDS | NOTABLE OUTCOMES | MANIPULATION & FALSIFICATION OF RECORDS | MISAPPROPRIATION OF CASH BALANCES | MISAPPROPRIATION OF GOODS | TEEMING & LADING | WINDOW DRESSING | SECRET RESERVES | ENRON FRAUD | WORLDCOM FRAUD | WHAT ARE FRAUDS ??? FRAUDS AND THEIR CHARACTERISTICS Misstatements in the financial statements can arise from fraud. In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual, Fraud
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false information about the sales and income in the company books, With an intention to inflate the worth of company's assets or profits, When a company is actually operating at a loss. The major reason behind the occurrence of accounting fraud at WorldCom Telecommunication company, The CEO of the company Ebbers focused largely on being the No.1 stock on Wall Street rather than capture market share or being global. This has led to creation of a pressure among the top management to meet the most important
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Audit at WorldCom. In 2002, Cooper and her team of auditors worked together and often at night and in secret to investigate and unearth $3.8 billion in fraud at WorldCom. At the time, this was the largest incident of accounting fraud in U.S. history. Since leaving MCI, Cooper has started her own consulting firm. In addition, Cooper speaks to professionals as well as high school and college students to share her experiences and lessons learned. Cooper's book about her life and the WorldCom fraud, Extraordinary
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problems of unethical behavior. In 2002, Enron/Andersen and the Worldcom scandal were two companies that involved in unethical behaviors. Enron was accused of secretive involvement of keeping debts concealed without reflected on the company’s account. The biggest bankruptcy in history was due to the fraudulent account of Worldcom. Unethical accounting practices and scandals of the caliber of the Enron / Andersen and the WorldCom scandals is what led the U.S. government to get involved and at the
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perceived liquidity of the organization or a company. * Failing to disclose the risky investments or creative accounting practices. * Over-recording the sales revenue. * Under-recording expenses i.e. depreciation of expenses. From Enron, WorldCom and HealthSouth, it appears that accounting fraud is a major problem that is increasing in frequency and severity. research evidence has shown that a growing number of frauds have undermined the integrity of financial reports, contributed to substantial
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