A Look Inside The WorldCom Scandal Essay

this area. Brief History of SOX Enactment The Sarbanes-Oxley Act of 2002 was created by Congress in response to financial scandals. There were several incidents which contributed to the need for legislature such as SOX. For purposes of brevity, the focus here will be on two of the largest financial scandals leading up to the passage of SOX, which are of those of Enron and WorldCom. In October 2001, Enron announced it was reducing after-tax net income by approximately $500 million & shareholders’ equity

law in 2002 and it was ment to ensure that publicly traded companies complied with policies that made their financial records honest and not distorted to make them look better or to make them look worse. This was supposed to cut down on the corporate fraud with accounting. This all started because some companies such as, Enron and WorldCom. Enron was reporting inaccurate trading revenues by acting as a middle man in partnerships and selling back and forth these partnerships and crediting Enron for the

INTRODUCTION: WorldCom was U.S based Telecommunications Company. It was second greatest long partition phone association in U.S., which had been working together since 19th century. It was built up in 1968. It was the benchmark long partition telecom and web access. Today, it is perhaps best known for a bookkeeping embarrassment that stimulated the association shred for insolvency security in 2002. WorldCom overseers effectively exaggerated the association 's bookkeeping numbers, enlargement the

Introduction WorldCom CEO Bernard Ebbers, former partner said “He didn’t know anything about the long distance or telephone business, but he knew how to read numbers, he was a number cruncher.”(“Inside”) This should have been a warning sign to those investing in the company that Ebbers wasn’t the best choice to run the 2nd biggest telecom company in America. WorldCom was just one of many accounting frauds that took place in the early 2000’s. But unfortunately that trend of dishonest accounting didn’t

In 1998, WorldCom would acquire MCI Communications Corporation for 37 Billion dollars. This would be the largest buyout in history during this time. In the next year WorldCom’s stock price would be at an all-time high at $64.50 a share. In 2000, WorldCom would be declined of a deal with Sprint for 115 Billing dollars by the Department of Justice. This would act as a foreshadowing for the issues that would later be brought to light by Cynthia Cooper and her team. For many years WorldCom would gain

businesses still functioning today.  Introduction Most people remember the Enron scandal that surfaced in 2001 and took down the goliath company within months. The corruption and greed that surfaced in the months after Enron went into bankruptcy was astounding and has been studied over and over again as to how exactly it was allowed to happen. Enron, combined with the bankruptcy of other giants such as Tyco and WorldCom, all due to corporate corruption and greed lead to the creation of the Sarbanes-Oxley

An Ethical Dilemma at WorldCom: A case study of Cynthia Cooper The Scenario One May afternoon, while sitting in his cubicle at WorldCom Inc. headquarters located in Clinton, Mississippi, Gene Morse was stunned to find an accounting entry for $500 million in expenses, which was not accounted for with any invoices. He immediately reported this entry to his boss, vice president of internal audit Cynthia Cooper (Pulliam & Solomon, 2002). Little did they know at the time that this discovery would begin

Fraudulent activities and embezzlement are more prevalent in organizations than most people think. Because of the multitude of previous scandals, the Sarbanes-Oxley Act has required all publicly traded U.S. companies to have internal auditing and internal controls to check for fraudulent activity and embezzlement. While the Sarbanes-Oxley Act only applies to public businesses, the requirements of it should be applied to all types of businesses, even universities. In the Case of the City University

As a result of these public scandals, it was a need in new more strict regulatory standards in terms of protecting investors from fraud activities of corporations. In order to ensure effective regulation, the Sarbanes-Oxley legislation contains eleven sections that describe responsibilities

What is statistic ethical practice? One will have to explain what ethic means. It is a norm for conduct that differentiate between that which is acceptable and that which is unacceptable. It is the concept of knowing right from wrong. One must have a moral sense of value to do no harm and to remain fair and just. To maintain ethical practice, the problem should be stated and the question need to be asked is there a conflict of interest. The facts need to be checked and verified. Relevant information