...Nortel Accounting Scandal History Nortel Networks Corporation, formerly known as Northern Telecom Limited and sometimes known simply as Nortel, was a multinational telecommunications and data networking equipment manufacturer headquartered in Mississauga, Ontario, Canada. It was founded in Montreal, Quebec in 1895. At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX), employing 94,500 worldwide, with 25,900 in Canada alone. Products Nortel made telecommunications, computer network equipment and software. It served both general businesses and communications carriers (landline telephone, mobile phone, and cable TV carriers). Technologies included telephonic (voice) equipment, fiber optics, local wireless, and multimedia. Board Members * Jalynn H. Bennett (Corporate Director) * James Blanchard (ex-American Politician and Lawyer) * Frank Carlucci (Chairman Emeritus) * John Cleghorn (Director) * Frank Dunn (ex-CEO) * Yves Fortier (Director) * Kristina Johnson (Director) * John MacNaughton (Director) * John Manley (Director) * Richard McCormick (Director) * Claude Mongeau (Director) * William Owens (Admiral) * John Roth (ex-CEO) Profile of the Event In 2007 both the U.S. Securities and Exchange Commission (SEC) and the Ontario Securities Commission laid charges against former senior financial officials from Nortel including then-CEO Frank...
Words: 1707 - Pages: 7
...Our case study discusses the rise and fall of one of the largest telecommunications corporations in the world, Nortel Networks Corporation. Nortel was one of the many early 21st century telecommunications companies that failed due to upper echelon management, a dysfunctional board of directors, inflated costs and earnings, and a smoke and mirrors illusion of stability. There were many avenues that could have been taken that would have prevented the demise and fall of the organization, but those roads were not traveled. Many argue that government intervention could have prevented the backlash and whitewater effect of Nortel’s bankruptcy, but due to corporate ties within the government and the Securities and Exchange Commission the many CEO’s continued to elude the government auditors and the stakeholders. From an ethical perspective, there were several factors that contributed to the rise and fall of Nortel. The initial CEO and founder of Nortel, John Roth, demonstrated altruistic behavior because he did want the company to profit, the investors to profit, as well as their primary stackholders. Nortel’s fall from grace came swiftly and on many fronts. Its market capitalization climbed to an all-time high of $398 billion in September 2000. Two years later, in August 2002, the amount had plunged to just $5 billion (Collins, 2011, pg. 536). In 2000, Nortel was Canada’s largest producing company and employed 93,000 people worldwide. Their research and development team was renowned...
Words: 2056 - Pages: 9
...Ji’nan Broadcasting Corporation What are the key issues facing Zhou Jianglin? The DVP is scheduled for launch in January 2002 which was 6 months from the initiation. Based on inputs from Chin(Postel) a project of DVP’s magnitude would require a lead time of 8-9 months. An alternative would be to source equipment from multiple suppliers. Sourcing the equipment from multiple suppliers would Type approval which would add uncertainty to the project and the approval itself would take 3 months. If multiple suppliers are involved clear demarcation points are required to avoid potential conflict of interest. There were internal objections from other division MDs. MD of Radio and Television Programming was of the opinion data & voice was the business of China Post & Telecom. Another MD, of the Radio & Television Broadcasting was of the opinion Alcatel equipment was more robust than Nortel’s. Budget was a key constraint as RMB 110 million was sanctioned but the initial estimates suggested it might cross the same. JBC needed in-house expertise to remotely monitor the network which was lacking. Zhou was not sure if reselling of long distance capacity was permitted by the Chinese government. - - Trace the history of decisions made in the data and voice project. 1) What were the decisions made? What were their implications? Decisions made and their implications are as follows - To launch the DVP by January 2002 – This decision was made without keeping in mind the time required to...
Words: 1010 - Pages: 5
...Outsourcing opportunities in global telecom industry The AirTel Story “When the proposal to outsource technology was originally put on the table most of our board members' jaws dropped, and they thought we had gone crazy." A statement given by Bharti Mittal ,CEO of Bharti Airtel which showed the world the effectiveness of outsourcing with its business model “Pay as you grow”.In this model,the network and other utilities are managed by reputed companies which ensures a high quality to the customers. This has enabled Bharti to convert its fixed costs involved with capital expenditure to the variable cost on the rate of usage. This Indian Telecom giant with a limited expertise on technology has managed services with Nokia Siemens Networks and IBM which has improved its technological prowess and decreased its excess workforce. The core competencies of Airtel have been market planning ,branding and identifying customer needs. The net result of this endeavor is that the company can offer mobile telecom service at one of the lowest rates in the world enjoying an compounded annual growth rate of 120% in sales revenues and around 300% in net profits between the year 2003-10. The rise of managed services In the recent past,the line between core and non-core competencies has blurred. The main reasons behind this paradigm shift are competency needs ,financial pressures, operational efficiencies and the change in the telecom business environment. Thus came the era of managed services...
Words: 1465 - Pages: 6
...1097961 Nortel Networks was once a Canadian telecommunications corporation worth $300 billion dollar that nearly employed 90,000 people during its height on operations in the 90’s (The Canadian Press 2014). In 2009 Nortel networks had to file for bankruptcy. Nortel’s bankruptcy is considered one of Canada’s largest bankruptcy cases in Canadian history (The Canadian Press 2014). In 2007 the Securities Exchange Commission files a lawsuit against Nortel for accounting fraud. Nortel was accused of not following the Generally Accepted Accounting Principles. The two main principles that Nortel executives were accused of were going against the revenue recognition principle and the provisions principles. Nortel broke the revenue recognition principle for the sole purpose of meeting budgeted sales and revenues (Cullen 2007). What Nortel would do was to not recognize expenses right away and to recognize unearned revenue (Cullen 2007). The reason for breaking these rules was to magnify their revenue and profits. Nortel broke the provisions principle by recognizing their expenses later on causing profits to increase (Cullen 2007). While breaking these rules managers and executive members of Nortel would still collect their yearly bonuses and benefits based on the profits the company would make that year. Nortel on paper was showing that it had made more revenue than it should. The managers in the financial departments all had their ethical issues. Maybe Nortel needed more...
Words: 388 - Pages: 2
...Business Ethics in a Global Context Executive Summary TransCanada and the Pipeline Industry Ethical decisions are important in any organization, regardless of location, industry or size. The importance is paramount in the oil industry due to the danger to the environment, local towns and cities, and employees. The following project looks at the TransCanada Company in detail to determine the practices and policies they have in place to ensure ethical decisions are made. The paper will explain the company’s goals, current systems in place and plans for the future. It will also show past examples of why careless mistakes and risky behaviour could cripple a company’s performance, even if the mistake is minor. The TransCanada Company is a Canadian giant and a world leader in energy. They specialize in many regions of the energy industry, including gas, electricity and oil. Currently, they have over 10 natural gas pipeline projects, 13 oil pipeline projects and 8 electric projects on the go, not to mention their existing infrastructure and day to day operations. They have over $46 billion in assets and are constantly expanding, devoting billions in investments across North America every year. A Company of this size with so much power needs to behave in the most ethical way possible and consider all stakeholders with the utmost respect. A lack of attention to detail and its effects on society could lead to disastrous effects to not only North America but to TransCanada...
Words: 14163 - Pages: 57
...March 29, 2013 ACC230 Nortel Networks Case The Nortel case does show that Nortel has agreements in associated to the guarantee under FIN 45. The payments based on a liability, charges relating to assets, or equities security that was provided by third parties has to be made to that third party. Nortel was able to retain liabilities for the events that occurred before the sale. Nortel guaranteed escrow for specified periods and had no limits of the potential amounts of the liabilities. It seems to be common for a business sale agreement to exclude maximum amounts of these liabilities since it is difficult to estimate the maximum potential of them for the indemnification guarantees. The company has agreements with its customers, lease agreements, third party debt, banks, agents and suppliers of intellectual property. Nortel has not made any indemnification payments in relation to any of the agreements mentioned. With regards to the commitments Nortel has made those commitments through bids, performance bonds, and other bonds that are in relation to their contracts. Nortel did not make any significant payments for any of these. The company did make capital agreements requiring them to fund new capital. The commitment they have of $16 million expires on a variety of dates through 2012. Nortel has purchase commitments with some suppliers that hold Nortel to detailed purchases and minimums. I think that the disclosures are stated well, but based...
Words: 253 - Pages: 2
...This essay will outline events that lead to the fall of Nortel network, a very successful Canadian maker of telecoms equipment in the late 1990’s. Nortel was huge and ranked as one of the largest firms of the world. This success did not last long as acquisitions of fraud, misalignment of funds among other unethical behavior were occurring. Small investors and stakeholders incurred the biggest loss. Nortel Network, a Canadian technology company was considered a fast-moving giant. The company was quick to integrate acquisitions and developed and built innovative telecom products. It seems as if nothing could stop the growth and uprising price of shares. The downfall of Nortel began when the top executives were accused of falsifying reported earnings. Top-notch executives were buying and selling stock within their retirement plans and massive accounting discrepancies were discovered. These suspicious outcomes let the United States Securities and Exchange Commission (SEC) to launch an investigation in April 2004. The company continued to plunge and deteriorate. In January 2009, Nortel filed Chapter 11 bankruptcy protection in the United States, and Companies' Creditors Arrangement Act (CCAA) in Canada. The rise of Nortel was due to innovation and timing. In July 2000, at the height of its success, with a market capitalization in excess of $350 billion Canadian dollars, Nortel accounted for 37 percent of the Toronto Stock Exchange Composite Index Value (Collins, 2012). This fast...
Words: 1748 - Pages: 7
...been 110 Million, but the Proposal from Postal/Nortel has come for 107.5 million. Including engineering, installation and maintenance, the project is over budget by 37.4 million dollars. 2. Non Availability of in house telecommunications Engg Expertise at JBC which makes them completely dependent on Postal/Nortel which again leads to Risky Situation as far as Short term span of the Project is considered. 3. The director of the Services division, who is an influential stakeholder preferred a comparison between Nortel and Alcatel before deciding on the equipment provider for the project. However Postal (who will ultimately deliver the solution to JBC) positioned the deal in such a way that including bids from Alcatel and Nortel would delay the project, and got the project scope only from Nortel for the data equipment. Though Nortel agreed to be compatible with Alcatel voice equipment as part of the turnkey solution, Zhou will have to convince his stakeholders as to why the comparison was not done for data equipment 4. Han has to look into the Regulatory Issues Like whether data and voice services can be sold by non-government entities or not, and the Project can also not be Delayed as this will affect the Timely Completion of the Project. Q 2. What were the decisions made? What were the implications? 1. Postal was selected for implementation of the DVP project. He had a good working relationship with Nortel and the implication of this deal was that he...
Words: 1718 - Pages: 7
...Marketing Mix and Communications Ashley Klinger Marketing on the Internet- 2 Instructor: Lori Wortylko Competing with Cisco What companies are Nortel’s major competitors? Nortel network’s three major competitors are Cisco Systems, Inc., Alcatel Lucent Nokia Solutions and Networks B.V. Is Cisco among them? Yes Cisco is one of Nortel Network’s major competitors. According to Hoovers.com, Cisco is the number one competitor for Nortel. I could not find much about Nortel being in competition with Cisco because Nortel has since went bankrupt. There were so many things that Nortel was doing wrong. So because of that alone, Nortel was no real competition for Cisco. Nortel had a large security breach that was caught in 2004. There were malicious hackers who had gained access to all of Nortel’s documents like emails and ideas. It went on for what is believed to be around ten years or so. By the time Nortel started to sell off its assets in 2009, the hackers had still not been caught. What types of marketing jobs are available? I found a lot of marketing based jobs available on Cisco’s website. I chose Technical Marketing Engineer. The minimum job requirements are: * Experience designing and implementing data center infrastructures. * Experience with Cisco Unified Computing System (UCS). * Strong background on various hypervisor technologies. * Ability to set and meet deadlines. * Excellent troubleshooting and problem-solving skills. ...
Words: 421 - Pages: 2
...Certifications: A+ ACE Associate Project Manager CAPM Certification CBAP" - Certified Business Analysis Professional CCCI - Certified Computer Crime Investigator CCE - Certified Computer Examiner CCFT - Certified Computer Forensic Technician CCSA/CCSE Check Point CEECS - Certified Electronic Evidence Collection Specialist CEH - Certified Ethical Hacker CEIC - Computer and Enterprise Investigations Conference CFCE - Certified Forensic Computer Examiner CFE - Certified Fraud Examiner CFIA - Certified Forensic Investigation Analyst CHFI - Certified Hacking Forensic Investigator CIFI - Certified International Information Systems Forensic Investigator CISA - Certified Information Systems Auditor CISM - Certified Information Security Manager CISSP - Certified Information Systems Security Professional CISSP-ISSAP - Information Systems Security Architecture Professional CISSP-ISSEP - Information Systems Security Engineering Professional CISSP-ISSMP - Information Systems Security Management Professional CIW - Certified Internet Webmaster CNA - Certified Novell 5 Administrator CNE - Certified Netware Engineer CNSS 4013 Recognition CPE - Certified PGP Engineer - PGP Corporation CSA - Certified Security Analyst CSE - Certified Steganography Examiner CSFA - CyberSecurity Forensic Analyst CSICI - CyberSecurity Institute Certified Instructor CSIH - Certified Computer Security Incident Handler CSTA - Certified Security Testing Associate CSTP - Certified Security...
Words: 1957 - Pages: 8
...accessory, service and support offerings. During the year ended November 24, 2011, the Company, as part of a consortium, acquired Nortel Networks Corporation's patent portfolio. In February 2012, the Company acquired app-search engine Chomp. Apple Incorporation is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. During the year ended November 24, 2011, the Company, as part of a consortium, acquired Nortel Networks Corporation's patent portfolio. In February 2012, the Company acquired app-search engine Chomp. Apple Incorporation is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. During the year ended November 24, 2011, the Company, as part of a consortium, acquired Nortel Networks Corporation's patent portfolio. In February 2012, the Company acquired app-search engine Chomp. Apple...
Words: 628 - Pages: 3
...Sarbanes Oxley Companies Abstract Sarbanes oxley act 2002 was passed on July 30, 2002 and only the public companies are now feeling its impact. This act frequently called the “most significant accounting or auditing legislation since the securities exchange Act of 1934”. After the implementation it has established its demands to the companies for proper management and disclosure of risk. Nortel networks is a giant corporate in telecom industry and as it is expected they also have faced the challenges come from the SOX act. Some of them are in favor and some are against the Nortel. ‘SOX’ has manipulated a larger impact on Nortel internal employee and external customers as well as their financial statement. The outcome of the Nortel is clearly different from before implementing the SOX. This paper is to find out the deeper understanding of SOX, how it governs the public corporate, financial disclosure and practice of public accounting in general sense. Besides this it will focus on the outcomes of Nortel network after implementation of SOX and its financial statement. Introduction There have been found a number of corporate financial scandals (e.g. Tyco International) that provides various type of weakness in the governance and auditing practice in the organization. It represents the failures in controlling the reliability and integrity to the stock markets. The scandals cost billions of dollars for the investors when the affected companies were collapsed. As a result, these...
Words: 6143 - Pages: 25
...and buyout in a bit as well as mentioning some of the big players in this fiber optic game. Every few days there seems to be a new fiber related deal going on. Just to note a few of the bigger ones; JDS Uniphase merged with E-Tek Dynamics in a $15 billion (US) deal. JDS is a product from a merger a year previous with JDS Fitel and Uniphase; is already one of the largest fiber-equipment companies, and well on its way to becoming what analysts call the Intel of fiber (referring to Intel’s dominance of the computer chip market). Nortel Networking is another company throwing large sums of money around in the fiber world, paying $3.2 billion (US) for Qtera Systems who’s technology boosts the carrying power of the fiber. Nortel’s competitors are also on the move as well. Cisco Systems, paid $7 billion (US) for an optical startup company called Cerent. Lucent Technologies paid $1 billion (US) for Nexabit, a company with no sales to date. Companies like Nortel and is larger cousins need to move fast because some of the industries smaller companies are pricing themselves out of range of the bigger companies. A small company...
Words: 1117 - Pages: 5
... Feroz Ahmed & IEEE student branch. Our respected faculty Dr. A K M Baki was also with us to assist. We were at Mohakhali Office (BTCL) where most of the topic covered was based on Microwave. The supervisor Engineer gives the idea as clear as possible at the given time. We only visit one connectivity room which is known as Mirroring Submarine Connectivity Room. This submarine cable is connected sequentially form Cox Bazar to Dhaka. The connectivity of this cable is shown below. In BTCL there are 5 STM-64 are used with speed of 10GB/s for each of them. Among them four STM-64 are NORTEL-6500 company and one is KT company. DWDM scheme is used in SDH-MUX system which gives the output at 10 GB (Highest output is 100GB). Everyone have the particular wavelength with different color. Then these all wavelength are making together combine. So at last four pair cable are out from every MUX in NORTEL. The BTCL rent one extra cable from the PGC for protection of cable if any fault is creating. In this submarine connection CB4 is use which is also use by 14 countries. After Cox bazar this submarine cable is connected to Singapore in one side and UK in another side. This is also supply in different company as like as IIG (= International Internet Get way) and IGW (= Internet Get Way). The IP bandwidth is almost 25GB. In every STM-1 have 63 E1 carriers. For use E1 co-axial cable for data communication it should me make Ethernet. If it has optical port at that time it can be use directly...
Words: 578 - Pages: 3
