Worldcom

WorldCom WorldCom was one of the worlds largest telecommunications companies with 20 million consumer customers, thousands of corporate clients and 80,000 employees rear in the year 2002. They grew largely by aggressively fetching over other telecommunications companies, the biggest being MCI Communications in 1997 (Wikipedia, 2010). each that began to crumble in June 2002 when the communitys own privileged audit department uncovered approximately $3.8 gazillion of charade and reported it to the board of directors (Associated Content, 2010). The internal audit had discovered that $3.3 billion in profits were falsely recorded on the companys books from 1999 to the first quarter of 2002. After investigating and doing a review of the companys accounts, it was found that the company was really in debt of about $41 billion. The fraud was committed by a group of individuals in WorldComs invoice department on a lower floor the leadership of CFO Scott Sullivan, as well as chief executive officer Bernard Ebbers. The basis of the accounting fraud was found to arise from ii main areas; the overstatement of revenues and the understatement of expenses, as well as the mishandling of reserves.

entirely these moves, which were made due to pressure for growth of WorldCom and meeting rampart Street analysts expectations, do not conform to the Generally accepted Accounting Practices (GAAP). Additionally, WorldComs numerous acquisitions (more than 60) in a short stoppage of time resulted in faulty information systems, making accounting more complex to handle. When the problem of its accounting scandal broke, legion(predicate) of the companys banks refused to lend them with any more funds which caused a lot of problems for the company. Because of this, the company was forced to file for bankruptcy under Chapter 11 of the United States Bankruptcy Code in July 2002 in order to protect itself from its creditors. They had to do this because under Chapter 11 of the code, the company will be able to operate ordinarily while giving it time... If you want to get a abounding essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.