The company became traded publicly as a corporation in as a result of a merger with Advantage Companies Inc. The company grew rapidly in the s. Had the deal been completed, it would have been the largest corporate merger in history. However, the deal floundered due to opposition from the U.
WorldCom, the second-biggest U. In addition, the company said it would lay off 17, workers beginning Friday. Stock markets reeled from Asia to Europe to the U. The index plunged as low as 1, If the index closes below 1, Bush on Wednesday said the accounting irregularities at WorldCom were "outrageous", and promised to hold accountable those who were responsible for the scandal.
Hodulik, an analyst for UBS Warburg. It will restate earnings for all of and the first quarter of When spending is listed as a capital expense, a company can delay applying it against earnings and spread its effect over many years, thus keeping its profits on paper higher.
Standard accounting rules are relatively clear about what kind of purchases, for instance office equipment, can be listed as capital expenses and which must be listed as operating expenses and deducted immediately from profits.
WorldCom, which already was under investigation by the U. Securities and Exchange Commission SECsaid it discovered the accounting problem during a routine internal audit. The Clinton, Mississippi-based company, which switched auditors from Andersen to KPMG this year, said it booked operating expenses such as routine network maintenance as capital investments, which allowed it to hide expenses, inflate cash flow and artificially post profits.
WorldCom promptly announced plans to axe 17, jobs, or more than 20 percent of its work force, starting Friday. WorldCom grew from a small long-distance company into a telecommunications force through more than 60 acquisitions in the past 15 years.
And now this is the age were wheeler-dealers get called for what they are," said Frank Dzubeck, president of consulting firm Communications Network Architects.
According to WorldCom, UUNet has a network spanning 3, points of presence with more than 2 million modem ports. But in a statement, Andersen said that WorldCom had withheld key information and not consulted its auditors about the accounting treatment of the expenses.
The revelation adds WorldCom to a growing list of companies struck by accounting scandals, led by Enron Corp. The Associated Press and Reuters contributed to this report.ACCOUNTING FRAUD AT WORLDCOM. Introduction WorldCom, US second largest telecommunication company shocked the world byfiling bankruptcy at 21 July Accounting ethics is both a normative and descriptive discipline.
Interest in business ethics and accounting ethics accelerated dramatically during the s and s, both within major.
MCI, Inc. (d/b/a Verizon Business) was an American telecommunication corporation, currently a subsidiary of Verizon Communications, with its main office in Ashburn, alphabetnyc.com corporation was formed originally as a result of the merger of WorldCom and MCI Communications corporations, and used the name MCI WorldCom, succeeded by WorldCom, before changing its name to the present .
International Journal of Business and Social Science Vol.
4 No. 7; July Forensic Accounting and Financial Fraud in Nigeria: An Empirical Approach. Three unlikely sleuths, armed with accounting skills and determination, tracked down fraud at WorldCom by following hunches and sniffing out cryptic clues.