With the help of Mr Sullivan's financial engineering Mr Ebbers raced the business - now called WorldCom - through 70 deals in four years, buying up competitors and expanding his reach. Along the way the company picked up numerous fans on Wall Street, perhaps most notably Jack Grubman, a telecoms analyst at the prestigious investment bank Salomon Smith Barney. Like many analysts of the time, Mr Grubman believed that to succeed in the new era of the internet and the world wide web companies needed
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Chad Ducharme Macroeconomics What do Enron, Tyco, and World-com have in common Intro The purpose of this work is to show you what happens when you try to cheat the system. the reason the government does audits and checks for so many frauds is because people nowadays will do whatever it takes to make a little extra money. What these companies did not only hurt themselves in the long run but hurt the millions of workers and families that were connected with them. The Companies Enron was formed
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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
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In summer 2002 WorldCom, the fastest rising company in the US history with its CEO of 17 years Bernard Ebbers was busted for fraudulent financial activities (American Greed, 2008). The history of the company dates back to 1983 when Long Distance Discount Services (LDDS) was founded. The company was providing long distance calling for cheap by doing acquisitions and buying smaller phone companies (American Greed, 2008). Bernard Ebbers was company’s CEO and within 10 years he was able to make LDDS
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WorldCom is one of the biggest scandals that happen in the world, especially in the United States of America. WorldCom merged with MCI in 1997 for US$37 billion to form MCI WorldCom. Later on WorldCom wanted to merge with Sprint Corporation in 1999 becoming a $129 billion merge, but before the two companies finalized the US department of Justice and the European Union stepped in and didn’t want this to happen, for this merge had the possibility of creating a monopoly. Bernard Ebbers was the CEO
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What is auditing? systematic examination of books, accounts, documents and vouchers of a organization to ascertain how far the financial statements present a true and fair view of the concern. Auditing principles Fair presentation - Obligation to report findings truthfully and accurately. Independence – Impartiality and objectivity. Conclusions should based on evidence & findings Evidence- reports should have verifiable ability. Roles and responsibilities of auditors Inquiring of management
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Company’s History WorldCom, a long distance discount telephone service, was founded by Bernard Ebbers in 1983. Bernard Ebbers became the CEO in 1985 and the company went public in 1989. Bernard Ebbers was also listed in Forbes as one of the richest men in the U.S. At its peak, WorldCom had about 20 million customers and 80,000 employees and was the second largest long distance carrier in the U.S. WorldCom grew largely by aggressively acquiring other telecommunication companies like MCI Communications
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Auditing & assurance Case 1.2 1. Consider the principles, assumptions and constraints of Generally Accepted Accounting Principles. Define the revenue recognition principle and explain why it is important to users of financial statements. According to the revenue recognition principle, revenues are recognized when they are realized or realizable, and are earned. Thus, it does not matter when the cash is received. To break that definition down, revenues are realized when products are exchanged for
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Case 1.11 WorldCom: The Definition of an Asset Line Cost Expenses WorldCom generally maintained its own lines for local service in heavily populated urban areas. However, it relied on non-WorldCom networks to complete most residential and commercial calls outside of these urban areas and paid the owners of the networks to use their services. For example, a call from a WorldCom customer in Boston to Rome might start on a local (Boston) phone company’s line, flow to WorldCom’s own network, and then
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Effects of Auditing Standards Business auditors are a valuable and much needed method of making sure that business and corporations operate within the law. Auditing businesses is the best method to determine if a business is keeping their methods legitimate and that they are not doing anything illegal such as falsifying profit reports. Standards for all manner of businesses from the small store to the international multi-million dollar industry are getting higher and frankly, this is a change that
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