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

ACCOUNTING FRAUD AT WORLDCOM 第一页，共37页。第二页，共37页。WorldCom Overview第三页，共37页。WorldCom Overview第四页，共37页。WorldCom OverviewFinancial statements Financial Highlights1995199920012004Revenues ($ billion )$2.2$37.1$35.2$20.7Total assets ($ billion )$3.4$91.1$103.9$17.1Employees (in 000)7.597.687.840.4Market capital($ billion )$3.3$150.5$42.8$6.4Debt ($ billion )$0.8$13.1$30.0$5.9Total capitalization ($ billion )$4.1$163.6$72.8$12.3第五页，共37页。第六页，共37页。Nature of Accounting FraudDefinition :Accounting fraud is the intentional misrepresentation of financial statements in order to obtain wrongfully an advantage, retain a benefit, or avoid a detriment第七页，共37页。Nature of Accounting FraudPressure to “cook the book”a) The growing pace of income is generally slowing downb) Driven by interests (political interest like personal fame and image in the public, economical interest )第八页，共37页。Nature of Accounting FraudTypical 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 realInflated income第九页，共37页。Nature of Accounting FraudDifference between earning smoothing and accounting fraud Consistency Matching Conservatism choosing of accounting item 第十页，共37页。Nature of Accounting FraudWhat did WorldCom do :Accounting fraud in two method: improper release of accruals improper capitalization of operating expense第十一页，共37页。第十二页，共37页。Problems (Internal)第十三页，共37页。Loss of strategic direction Failure to acquire SprintThe poor performance第十四页，共37页。Corporate cultureemployees should not question their superiors there is no written policies. Each department had its own rules第十五页，共37页。Organizational structure legal function was less influential and less welcome than in a healthy corporate environment The corporate governance structure is so complicated Information is not consolidated 第十六页，共37页。Board of directors 50% of nonexecutive members No regular communication Decisions not based on the inte