Worldcom Accounting Fraud-世通财务造假案例分析.ppt

Fall of WorldCom What happened on senior management Ebbers-CEO 25 years in prison Sullivan-CFO 5 years in prison Myers-controller 1 year in prison Yates-Dir of Acctg 1 year in prison Vinson-Acctg Dept 5 months in prison Manager 5 months house arrest Normand-Acctg Dept 3 probation Manager * ppt课件 Board of director 12 director agreed to pay a total of $25m to settle securities class action case Investment Bankers :settlement of security class action Citi Group $2.6 billion JP Morgan $ 2.0 B Other $ 1.4B Grubman and Soloman Brother Securities Analyst fined $15M and banned for life from practice. Fall of WorldCom * ppt课件 ppt课件 ppt课件 ppt课件 ppt课件 ppt课件 ppt课件 ppt课件 ppt课件 ACCOUNTING FRAUD AT WORLDCOM * ppt课件 * ppt课件 WorldCom Overview * ppt课件 WorldCom Overview * ppt课件 Financial Highlights 1995 1999 2001 2004 Revenues ($ billion ) $2.2 $37.1 $35.2 $20.7 Total assets ($ billion ) $3.4 $91.1 $103.9 $17.1 Employees (in 000) 7.5 97.6 87.8 40.4 Market capital($ billion ) $3.3 $150.5 $42.8 $6.4 Debt ($ billion ) $0.8 $13.1 $30.0 $5.9 Total capitalization ($ billion ) $4.1 $163.6 $72.8 $12.3 WorldCom Overview Financial statements * ppt课件 * ppt课件 Definition : Accounting fraud is the intentional misrepresentation of financial statements in order to obtain wrongfully an advantage, retain a benefit, or avoid a detriment Nature of Accounting Fraud * ppt课件 Pressure to “cook the book” a) The growing pace of income is generally slowing down b) Driven by interests (political interest like personal fame and image in the public, economical interest ) Nature of Accounting Fraud * ppt课件 Typical methods to “cook the book” Cost of assets Inventory is not real Fixed asset is fake Unreal liabilities Accounts payables is overvalued Accrued expenses are not real Inflated income Nature of Accounting Fraud * ppt课件 Difference betw