WorldComCorporate Fraud.ppt

WorldCom:Corporate Fraud Amanda Barnes Catherine Collins Lamar Jamison WorldCom Background Huge telecommunications company Largest in the U.S. Held responsible for waking up it’s somewhat sluggish industry in the early 90’s Industry Telecommunications giant Provided: Internet Services Long Distance and various other phone services for a cheaper price than competitors WorldCom’s Ascension ATT monopoly break-up CEO Bernie Ebbers repackages leftovers and sells them at a bargain price. Broadened services available. WorldCom’s Ascension 75 mergers and acquisitions of smaller companies. Bought competitor MCI. Attempted to buy Sprint in 2000. Anti-trust regulations wouldn’t allow Sprint acquisition. WorldCom’s Fall The company began to fall in 1999 with massive lay offs and the steady decline of it’s stock price. Stock prices for WorldCom were around 60 dollars and dropped to pennies in 2002. Business sector mergers were unsuccessful. Stock Price Bernie Ebbers Founder of WorldCom Aggressive businessman who seemed to be the fire for WorldComs success. Fed new ideas into the company for expansion Bernie Ebbers Resigned after allegedly using funds from his company to cover his losses from his stock holdings This brought into question the supposed “earnings” for WorldComs 2002-2004 fiscal years. Various Scandals Many companies under the eye of the government after financial scandals such as Enron surfaced. WorldCom watched closely because of it’s shaky future outlook Accountants everywhere under speculation at major corporations. Financial Accountants Accounting firms and auditors for companies are in charge of a company’s financial reports. They must know the federal regulations for reporting earnings and such so that no figures are misrepresented. Accounting Help companies answer these questions: how much they made how much they can save how much they should pay in government taxes how much they can use for other things (expansion, dividends, etc.) The Scandal In July