WorldCom accounting misconducts or frauds

Summary

In 2002 world witnessed a shocking revelation of accounting scandal in Unites States second largest telecommunication company “WorldCom” which was hailed for its quality products, excellent working environment and top quality leadership. However, Worldcom suffered a huge below after the revelation of $3.8 billion scandal which was made during the period of January 2001 and March 2002. According to worldcom official its then chief financial officer (Scott D. Sullivan) and its associate (David F. Myers) offensively and deliberately changed the figures of financial report by entering expense figures under the head of investment in financial report (BBC, 2002). According to the chairman of the commission of SEC “Harvey Pitt” the nature of fraud was far sever in financial terms then misdeeds of Enron and other companies (BBC, 2002.



WorldCall accounting misconducts

Background of the company

WorldCom or MCI is known as American Telecommunication Company; presently a subsidiary unit of Verizon Communications, whose headquarter is situation in Ashburn, Virginia. This organization was initially incorporated after the successful merger deal between WorldCom and MCI Corporation. However, during the initial years of its operation the company was regarded as the second largest elongated space telephone Company after their major competitor AT&T.

Besides its ability of producing quality products, the company major source of expansion was its ability to acquire the share of sound and well-known telecommunication companies of the country (Eichenwald, 2003). Moreover, before the occurrence of accounting scandals company was known for providing quality services to its international and national customers.

In addition to this, it received numerous awards for implementing sound working environment policies providing every worker the opportunity of working with freedom and numerous opportunities for accomplishment of their professional goals. The situation took a drastic change for MCI WorldCom in year 2000 after the disclosure of major accounting ...