Introduction MCI WorldCom was among the biggest telecommunications companies in the world. Bernie Ebbers established WorldCom in 1983, after that WorldCom began as a re-seller of long-distance telephone services. WorldCom is located at Mississippi. After Ebbers purchased around 50 other small long-distance companies, he set his sight on MCI. Therefore MCI WorldCom would have ended up being the second most significant telecom provider in 1997. MCI WorldCom was formed on September-15-1998. WorldCom merged with the $37 billion MCI Communications Corporations,…...
The function of this report is to look back at one of the most significant US business scandals: WorldCom. WorldCom drop was the greatest bankruptcy in United States business history: 20,000 employees lost their tasks, investors lost about 180billion dollars. How did all this take place? Unethical practices: 1. Modification in accounting policy: there was a modification in the accounting policy in 2000 to support an extra accrual release. GAAP does not allow using accruals developed through charges for one…...
Accounting can be best described as a type of tool or language put in place in order to provide appropriate information with regards to the financial position of an organization, corporate or business. With this kind of information, it will always be critical to investors as it provides them with relevant and thorough information that could turn out to be the deciding factor whether to invest or not to invest in a particular organization. Hence, it is very common to…...
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Basic Questions 1. Rigas Entities were entities that shared a common cash management system with Adelphia and Adelphia subsidiaries, which Adelphia controlled and operated. Since the scandal broke, it is commonly referred as off-the-book entities. 2. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is essentially net income with interest, taxes, depreciation, and amortization added back to it, and can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting…...
Introduction WorldCom was America's second largest telecom company in 2000 (The WorldCom Accounting Scandal, 2002). Making a modest beginning in the hinterland of Mississippi in 1983 with a meager capital of less than 100,000 USD it reached the pinnacle of corporate success reporting more than USD 39 billion in revenue and USD 150 million in MCAP (The WorldCom Accounting Scandal, 2002). In the process it became 42nd in the Fortune 500 list. Under the leadership of CEO Bernie Ebbers it…...
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