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A CASE STUDY IN ACCOUNTING ETHICS AT WORLDCOM
A. INTRODUCTION
On 21 July 2002 the second largest telecommunications company in the U.S.,
WorldCom, Inc., applied for bankruptcy protection. WorldCom failed because of the bad
business decisions of its executives to manipulate earnings with improper accounting entries.
The key executives involved in the fraud were CEO Bernard Ebbers and CFO Scott Sullivan.
The accountants who were pressured by Ebbers and Sullivan to prepare improper accounting
entries included Director of General Accounting Bufford Yates, Controller David Meyers,
Director of Legal Entity Accounting Troy Norman, and Director of Management Reporting
Betty Vinson. Each was convicted of securities fraud and received federal jail sentences,
including billionaire Bernie Ebbers who received a 25-year sentence in federal prison.1 Betty
Vinson received a 5-month jail sentence.
Another key player in this sad story of greed and conflicting loyalties is Vice
President of Internal Audit Cynthia Cooper, a whistleblower who with two other internal
auditors, Gene Morse and Glyn Smith, doggedly investigated and revealed the fraud to
WorldCom’s audit committee.
In this case study you will read about the ethical pressure faced by Betty Vinson and
Cythia Cooper as they each balanced conflicting loyalties between family, employer, and
profession. Betty first balked then caved to the pressure and ruined her career; Cynthia did
not cave and was named one of three “Persons of the Year” by Time Magazine in 2002 for
her moral courage at WorldCom (Lacayo and Ripley 2002).
'
1Faber, David. The Rise and Fraud of WorldCom. CNBC, 8 September 2003.
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In December 2005, two years after this case was written, the telecommunications
industry consolidated further. Verizon Communications acquired MCI/WorldCom and SBC
Communications acquired AT&T Corporation, which had been in business since the 19th
Century. The acquisition of MCI/WorldCom was the direct result of the behavior of
WorldCom's senior managers as documented above. While it can be argued that the demise
of AT&T Corp. was not wholly attributable to WorldCom's behavior, AT&T Corp.'s
decimation certainly was facilitated by the events surrounding WorldCom, since WorldCom
was the benchmark long distance telephone and Internet communications service provider.
Indeed, the ripple effect of WorldCom's demise goes far beyond one company and several
senior managers. It had a profound effect on an entire industry.
This postscript will update the WorldCom story by focusing on what happened to the
company after it declared bankruptcy and before it was acquired by Verizon. The postscript
also will relate subsequent important events in the telecommunications industry, the effect of
WorldCom's problems on its competitors and labor market, and the impact WorldCom had on
the lives of the key players associated with the fraud and its exposure.
B. WorldCom Case
Worldcom was originally a company long distance telephone service provider. During
the 90s the company was doing some acquisitions of other telecom companies who then
increase pendapatnnya of $ 152 million in 1990 to $ 392 billion in 2001, which in turn puts
WorldCom in position 42 of the 500 other companies Majah's version of fortune.
Acquisitions that have taken place in 1998 when the company took over MCI
worlcom the second largest in the U.S. peruahaan engaged in long-distance
telecommunications. And in the same year the company bought Worldcom UUNet,
Compuserve, and AOL data networks (American Online) which confirmed the position of the
operator Worldcom became No. 1 in the Internet infrastructure.
In 1990 occurred the fundamental problems in the economy that is too large capacity
Worldcom telecom. This problem occurs because in 1998 U.S. economic recession that
reduced demand for the infrastructure of the Internet's impact on revenue drastis.hal
Worldcom pendpatan dropped dramatically so this is far from the diharapkan.padahal for
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acquisition costs and to finance infrastructure investments Worldcom use of funding sources
outside or debt.
Worldcom is not the only company that has financial problems pda that time, other
companies are experiencing financial problems between lainQwest Communications, Global
Crossing, Adelphia, Lucent Technologies, and Enron. Tersebuit companies have invested
heavily in the internet business. As in the earlier company Worldcom investors suffered huge
losses. Worldcom company's stock market value fall from about 150 billion dollars (January
2000) to around $ 150 million (1 July 2002). The state attempted mebuatan management
accounting practices to avoid the bad news.
Accounting Practice
In its report on June 25, Worldcom admitted that the company classifies more than $
3.8 billion for the network load as the network is spending modal.beben load kepda
Worldcom paid by other companies for telecommunication networks, such as the cost of
access and messaging cost for Worldcom. Reported approximately $ 3.005 billion has been
one diklasifiksi in 2001, while the remaining approximately $ 797 million in the first quarter
of the data 2002.berdasarkan pad Worldcom $ 14.7 billion in 2001 served as an expense.
By moving expense accounts to capital accounts, Worldcommampu raise revenue or
profit. Worldcom able to increase profits through expense account recorded lower, while
higher asset account is recorded as capitalized expenses are presented as an investment
expense. If it is not detected this practice will result in a lower net income in the years
brikutnya. Because the network load capitalization will didepresiasikan.secara essence
capitalization load network will enable the company to allocate biyanya in a few years in the
future, maybe between 10 years and even more.
Worldcom accounting staff were interviewed before 25 June. In March 2002 the SEC
requesting data from the company in the form of items related to the Financial Statements. It
includes:
1. sales commissions and bills are problematic
2. administrsi sanctions against income berhubungn with customers in a large scale
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3. accounting policies for merger
4. loans to the CEO
5. integration of computer systems with MCI Worldcom
6. analysis of the expected revenue shares WC
July 1, 2002 WorldCom announced that the reserve account at Worldcom also
investigated / examined. Company made this account to anticipate extraordinary events that
can not be predicted. Such as tax debt next year. Seharusnyaakun should not be manipulated
to earn an income.
August 8, Worldcom admitted that they had used the allowance account are not true.
Indictments were reported on the 28th of August is that the reduced reserve account to cover
the cost of the network that has been capitalized.
Audit questions
Based on this background, the presentation of the network load as capital
expenditures ditemukanoleh internal auditor Cynthia Cooper. The auditor Cynthia Cooper in
May 2002 to discuss the matter to the chief financial officer Scott D. Worldcom Sullivan and
corporate controller at the David F. Myers. Cooper reported the matter at the head of the audit
committee Max Bobbitt, around June 12. Which then Max Bobbitt asked KPMG as external
auditor to conduct an investigation at that time.
WorldCom chief financial officer are required to correct the misstatements / incorrect
classification. After further discussion Scott D. Sullivan dismissed the announcement held at
Worldcom. On the same day David F. Myers resigned. Reported that Sullivan had never
consulted presentation to the External data Artuhr Anderson as auditor in 2001. and Arthur
Anderson also stated that Sullivan was never consulted him.
On July 15, Tauzi which is the House Energy and Commerce Committee, said that
based on internal documents and emails Worldcom executives indicate that the actual
misstatement already know that since the beginning of summer 2000.Internal auditors are the
initial defense against errors paktek-accounting practices and accounting fraud. One question
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to the Internal Auditor Worldcom is why it took a long time (1 year) to uncover these
misstatements. Though considering that so large capitalization value and its effect on the
value of net income and total assets harusnnya could be expressed faster.
Questions heavier dilyangkan the Arthur Anderson accounting firm, some observers
claim that Arthur Anderson knew about the misstatements made Worldcom. Because Arthur
Anderson should be tasked to audit such mistakes, especially mistakes is very material. Some
observers also claim that Arthur Anderson should have been more sensitive to Worldcom's
financial condition, which could result in the company's management melakuakan case
beyond reasonable accounting practices.
Impact
June 25, 2002, Worldcom stock of $ 64.5 in mid-1999 to less than $ 2 per share. And
fell again to less than $ 1 a share value ultimately less than 1 cent. Worldcom employees who
have company stock as part of their pension funds also suffered losses. At the end of 2000
approximately 32% or $ 642.3 million of their pension in the form of saham.Dan announced
it would lay off 17,000 employees out of a total of 85 thousand employees.
July 21, 2002, Worldcom bankruptcy protection while the program of the United
States justice department. Worldcom reported assets of $ 103 billion with total debt of $ 41
billion. Worldcom bankruptcy was the biggest bankruptcy in United States
In 2004 the name changed mnjadi MCI Worldcom, and Worldcom CEO Ebbers be
changed from john Sidgemore. Scott D. Sullivan was charged with a maximum prison
sentence of 25 years in prison while Ebbers was charged with a prison sentence of more than
25 years.
From Benchmark to Bankrupt
Between July 2002 when WorldCom declared bankruptcy and April 2004 when it
emerged from bankruptcy as MCI, company officials worked feverishly to restate the
financials and reorganize the company. The new CEO Michael Capellas (formerly CEO of
Compaq Computer) and the newly appointed CFO Robert Blakely faced the daunting task of
settling the company's outstanding debt of around $35 billion and performing a rigorous
financial audit of the company. This was a monumental task, at one point utilizing an army of
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over 500 WorldCom employees, over 200 employees of the company's outside auditor,
KPMG, and a supplemental workforce of almost 600 people from Deloitte & Touch. As
Joseph McCafferty notes, "(a)t the peak of the audit, in late 2003, WorldCom had about 1,500
people working on the restatement, under the combined management of Blakely and five
controllers…(the t) otal cost to complete it: a mind-blowing $365 million"(McCafferty,
2004).
In addition to revealing sloppy and fraudulent bookkeeping, the post-bankruptcy audit
found two important new pieces of information that only served to increase the amount of
fraud at WorldCom. First, "WorldCom had overvalued several acquisitions by a total of $5.8
billion"(McCafferty, 2004). In addition, Sullivan and Ebbers, "had claimed a pretax profit for
2000 of $7.6 billion" (McCafferty, 2004). In reality, WorldCom lost "$48.9 billion (including
a $47 billion write-down of impaired assets)." Consequently, instead of a $10 billion profit
for the years 2000 and 2001, WorldCom had a combined loss for the years 2000 through
2002 (the year it declared bankruptcy) of $73.7 billion. If the $5.8 billion of overvalued assets
is added to this figure, the total fraud at WorldCom amounted to a staggering $79.5 billion.
Although the newly audited financial statements exposed the impact of the
WorldCom fraud on the company's shareholders, creditors, and other stakeholders, other
information made public since 2002 revealed the effects of the fraud on the company's
competitors and the telecommunications industry as a whole. These show that the fall of
WorldCom altered the fortunes of a number of telecommunications industry participants,
none more so than AT&T Corporation.
The CNBC news show, "The Big Lie: Inside the Rise and Fraud of WorldCom,"
exposed the extent of the WorldCom fraud on several key participants, including the then-
chairmen of AT&T and Sprint (Faber, 2003). The so-called "big lie" was promoted through a
spreadsheet developed by Tom Stluka, a capacity planner at WorldCom, that modeled in
Excel format the amount of traffic WorldCom could expect in a best-case scenario of Internet
growth. In essence, "Stluka's model suggested that in the best of all possible worlds Internet
traffic would double every 100 days" (Faber, 2003). In working with the model, Stluka
simply assigned variables with various parameters to "whatever we think is
appropriate"(Faber, 2003).
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This was innocent enough, had it remained an exercise. A problem emerged when the
exercise was extended and integrated into corporate strategy, when it was adopted and
implemented by WorldCom and then by the telecommunications industry. Within a year,
"other companies were touting it" and the model was given credibility it should not have been
accorded (Faber, 2003). As Stluka explains, "there were a lot of people who were saying 10X
growth, doubling every three to four months, doubling every 100 days, 1,000 percent, that
kind of thing" (Faber, 2003). But it wasn't true. "I don't recall traffic ... in fact growing at that
rate … still, WorldCom's lie had become an immutable law." Optimistic scenarios with little
foundation in reality began to spread and pervade the industry. They became emblematic of
the "smoke and mirrors" behavior not only at WorldCom prior to its collapse, but the industry
as a whole. Fictitious numbers drove not just WorldCom, but also other companies as they
reacted to WorldCom's optimistic projections. According to Michael Armstrong, then
chairman and CEO of AT&T, "For some period of time, I can recall that we were back-filling
that expectation with laying cable, something like 2,200 miles of cable an hour" (Faber,
2003). He adds: "Think of all the companies that went out of business that assumed that that
was real."
The fallout from the WorldCom debacle was significant. Verizon obtained the freshly
minted MCI for $7.6 billion, but not the $35 billion of debt MCI had when it declared
bankruptcy (Alexander, 2005). Although WorldCom was one of the largest
telecommunications companies with nearly $160 billion in assets, shareholder suits obtained
$6.1 billion from a variety of sources including investment banks, former board members and
auditors of WorldCom (Belson, 2005). If this sum were evenly distributed among the firms
2.968 billion common shares, the payoff would (have been) well under $1 a share for a stock
that peaked at $49.91 on Jan. 2000" (Alexander, 2005, 3).
There are more losers in the aftermath of the WorldCom wreck. The reemerged MCI
was left with about 55,000 employees, down from 88,000 at its peak. Since March 2001,
however, "about 300,000 telecommunications workers have lost their jobs. The sector's total
employment-1.032 million-is at an eight year low" (Alexander, 2005, 3). The carnage does
not stop there. Telecommunications equipment manufacturers such as Lucent Technologies,
Nortell Networks, and Corning, while benefiting initially from WorldCom's groundless
predictions, suffered in the end with layoffs and depressed share prices. Perhaps most
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significant, in December 2005, the venerable AT&T Corporation ceased to exist as an
independent company.
The Impact on Individuals
The WorldCom fiasco had a permanent effect on the lives of its key players as well.
Cynthia Cooper, who spearheaded the uncovering of the fraud, went on to become one of
Time Magazine's 2002 Persons of the Year. She also received a number of awards, including
the 2003 Accounting Exemplar Award, given to an individual who has made notable
contributions to professionalism and ethics in accounting practice or education. At present,
she travels extensively, speaking to students and professionals about the importance of strong
ethical and moral leadership in business (Nationwide Speakers Bureau, 2004). Even so, as
Dennis Moberg points out, "After Ebbers and Sullivan left the company, "...Cooper was
treated less positively than her virtuous acts warranted. In an interview with her on 11 May
2005, she indicated that, for two years following their departure, her salary was frozen, her
auditing position authority was circumscribed, and her budget was cut""(Moberg, 2006, 416).
As far as the protagonists are concerned, in April 2002, CEO Bernie Ebbers resigned
and two months later, CFO Scott Sullivan was fired. Shortly thereafter, in August 2002,
Sullivan and former Controller David Myers were arrested and charged with securities fraud.
In November 2002, former Compaq chief Michael Capellas was named CEO of WorldCom
and in April 2003, Robert Blakely was named the company's CFO.
In March 2004, Sullivan pleaded guilty to criminal charges (McCafferty, 2004). At
that time, too, Ebbers was formally charged with one count of conspiracy to commit
securities fraud, one count of securities fraud, and seven counts of fraud related to false
filings with the Security and Exchange Commission (United States District Court - Southern
District of New York, 2004). Two months later, in May of 2004, Citigroup settled class
action litigation for $1.64 billion after-tax brought on behalf of purchasers of WorldCom
securities (Citigroup Inc., 2004). In like manner, JPMorgan Chase & Co., agreed to pay $2
billion to settle claims by investors that it should have known WorldCom's books were
fraudulent when it helped sell $5 billion in company bonds (Rovella, 2005).
On March 15, 2005, Ebbers was found guilty of all charges and on July 13th of that
year, sentenced to twenty-five years in prison, which was possibly a life sentence for the 63-
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year-old. He was expected to report to a federal prison on October 12th, but remained free
while his lawyers appealed his conviction (Pappalardo, 2005).
At the time of his conviction, Ebbers' lawyers claimed the judge in the case gave the
jury inappropriate instructions about Ebbers' knowledge of WorldCom's accounting fraud
(Pappalardo, 2005). By January of 2006, Reid Weingarten, Ebber's lawyer, was claiming that
the previous trial was manipulated against Ebbers because three high level WorldCom
executives were barred from testifying on Ebbers' behalf. At that time, too, Judge Jose
Cabranes of the US Second Circuit Court of Appeals commented, "There are many violent
criminals who don't get 25 years in prison. Twenty years does seem an awfully long time"
(MacIntyre, 2006).
Weingarten went on to assert that the government "should have charged the three
former WorldCom employees that could have helped exonerate Ebbers or let them go"
(Reporter, 2006). He charged, too, that "the jury was wrongly instructed that it could convict
Ebbers on the basis of so-called "conscious avoidance" of knowledge of the fraud at
WorldCom" (Reporter, 2006). Perhaps most compellingly, Weingarten called into question
the fairness of Ebbers' sentence that was five times as long as that given to ex-WorldCom
financial chief Scott Sullivan (Reporter, 2006).
Weingarten's claims are not without merit. In August 2005, former CFO Sullivan was
sentenced to five years in prison for his role in engineering the $11 billion accounting fraud.
His relatively light sentence was part of a bargain wherein he agreed to plead guilty to the
charges filed against him and to cooperate with prosecutors as they built a case against
Ebbers. In doing so, Sullivan became the prosecution's main witness against Ebbers and the
only person to testify that he discussed the WorldCom fraud directly with Ebbers (Ferranti,
2005). Others involved in the scandal were also treated less harshly than Ebbers. In
September 2005, judgments were rendered approving settlement and dismissing action
against David Myers and a number of others associated with WorldCom (United States
District Court - Southern District of New York, Judgment Approving Settlement and
Dismissing Action Against Buford Yates and David Myers, 2005, Judgment Approving
Settlement and Dismissing Action Against James C. Allen, Judith Areen, Carl J. Aycock,
Max E. Bobbitt, Clifford L. Alexander, Jr., Francesco Galesi, Stiles A. Kellett, Jr., Gordon S.
Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, and Lawrence
C. Tucker, 2005).
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At the time of this update, Ebbers has been convicted by a court of law, but remains
free on bail while he pursues an appeal. Although the extent of his punishment is under
contention, one thing remains clear - that Ebbers and the other officers at WorldCom are
guilty of presiding over what is to date, the largest corporate fraud in history.
C. Resume Chronological :
The situation
WorldCom is a telecommunications company which was lead by CEO,
Bernard Ebbers, and CFO, Scott Sullivan.
In 1999, WorldCom was not meeting Wall Street‟s revenue and earnings
expectations, and it appeared that the coming year would produce more bad
news.
The CFO argued for setting realistic targets. However, the CEO insisted that
the company needed double digit growth, and pushed for aggressive targets.
These aggressive targets were not supported by historical data or strategic
assessments.
In order to meet these targets, WorldCom began boosting its revenue through
a wide range of accounting measures, including drawing down on reserves
set aside for expenses. The economic situation at the time was not taken into
account when implementing these aggressive accounting measures. Other
similar companies were reporting declining revenues.
It was identified that the management who were making the aggressive
accounting decisions, were also posting the journals to the general ledger,
and reviewing and approving the reporting.
Pressure was placed on personnel who did not support the aggressive targets.
A great deal of focus was put on “team work” and being a strong “team
player”, which is said to have been a strategy to reduce dissenting opinions,
eventually leading the organisation to follow a “groupthink” attitude.
In 2000, the telecommunications industry entered a downturn and
WorldCom‟s aggressive growth strategy suffered a serious set back.
However, due to the accounting measures used, by Q3 in 2000, the company
managed to meet the Wall Street expectations.
Finally, WorldCom‟s stock price started to plummet, and the CEO faced
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margin calls from his bankers, forcing him to either sell his shares or repay
the loans. He did not want to sell his shares as his doing so would put further
downward pressure on the stock price. Therefore, WorldCom directors lent
the CEO US$400 million to meet the loans requirements. Before the release
of Q1 results, 2002, the company‟s revenue was declining, making the task
of showing revenue growth through accounting manoeuvres nearly
impossible.
The disastrous first quarter results were released, and the CEO, Bernard
Ebbers, was asked to resign.
What are the issues?
- Beginning modestly in mid-year 1999 and continuing at an accelerated pace through
May 2002 :
“ The company (under the direction of Ebbers (CEO) and Sullivan (CFO)) used
fraudulent accounting methods to mask its declining earnings by painting a false
picture of financial growth and profitability to prop up the price of WorldCom‟s
stock.”
- The fraud was accomplished primarily in two ways :
“Underreporting „line costs‟ (interconnection expenses with other
telecommunication companies) by capitalising these costs on the balance sheet
rather than properly expensing them. Inflating revenues with bogus accounting
entries from "corporate unallocated revenue accounts.”
The outcome
- Over the course of its operations, WorldCom has successfully acquired a total of 65
companies, of which 11 were acquired between 1991 and 1997, and in that course has
accumulated around $41 billion in debt. By the time it declared bankruptcy in 2002, the
organization had a combined loss of $73.7 billion.
- In 2002, a small team of internal auditors at WorldCom worked together, often at night
and in secret, to investigate and unearth $3.8 billion in fraud. Shortly thereafter, the
company‟s audit committee and board of directors were notified of the fraud and acted
swiftly: Sullivan was fired, Arthur Andersen withdrew its audit opinion for 2001, and the
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U.S. Securities and Exchange Commision (SEC) launched an investigation into these
matters on June 26, 2002.
- By the end of 2003, it was estimated that the company's total assets had been inflated by
around $11 billion.
- On July 21, 2002, WorldCom filed for Chapter 11 Bankruptcy Protection
D. Analysis
Control environment
Unrealistic growth targets (double digits) when expectations were low.
Management‟s philosophy was to be aggressive. Increased pressure on people who did not
support the aggressive targets. The culture and atmosphere encouraged by aggressive targets
led to dishonest, illegal and unethical activities. A great deal of focus was put on “team work”
and being a strong “team player”, which is said to have been a strategy to reduce dissenting
opinions, eventually leading the organisation to follow a “groupthink” attitude. Directors
were allowed to loan $400m to WorldCom to meet loan requirements to cover up financial
difficulties. The control environment allowed this unethical activity to happen.
Risk assessment
Inadequate assessment of internal and external factors, and objectives before setting
aggressive targets. Economic conditions were not considered when implementing aggressive
accounting measures. Other similar companies were declining.
Control activities
Poor segregation of duties:
Reconciliation preparation and reviews
Journals preparation and reviews
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Information and communication
WorldCom CEO, Bernard Ebbers, and CFO, Scott Sullivan knowingly reported information
to their stakeholders, including employees and shareholders, that lacked support and integrity.
They communicated false targets and outcomes to Wall Street to ensure the stock price of
WorldCom continued to escalate and consequently decided to use a wide range of accounting
measures to meet these targets. Access to data entry and manipulation was not appropriately
segregated.
Monitoring
There is limited evidence to suggest appropriate review financial
reporting controls were being reviewed independently.
There was a lack of stringent monitoring of the internal control system
and therefore the quality of the controls around the posting of journal
entries to the general ledger was not identified as a weak control.
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Ethical Perspective
As defined, teleology is a consequentialism-based theory in a business situation
where, “managers must consider which action generates the best overall consequences for all
parties involved. This often entails a cost/benefit analysis aimed at identifying the action that
will maximize benefit for all the stakeholders of the organization”
Indeed, WorldCom’s overstatement classifying payments using other companies’
communications networks as capital expenditures and manipulating its reserve accounts was
questionable. Perhaps when interpreting accounting standards the company’s top executives
utilized the teleological theory where the good over the right became the benchmark of moral
behavior. In other words, the good is the greatest happiness of the greatest number of persons
The decisions and actions instigated by WorldCom’s executives believed they did no
harm and their accounting practices where justified. It helped to increase investor and
stockholder’s interest, making the company profitable over the past several years where all
stakeholders benefited. Since the goal was the greatest good for the greatest number, in this
case the stakeholders, that good may be achieved under conditions that are harmful to some
(other stakeholders), balanced by a greater good (positive profits)
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Conclusion
WorldCom cases drawn from the above conclusion that every ethical behavior and
confidence (trust) may affect the company's operations. weve, ethics in business will not
benefit immediately, because it's the business person must learn to see the long-term
prospects. And Impact on Accounting Profession Activity recording manipulation of the
financial statements that do not in spite of aid management accountant. Accountants who do
provide information that led to the financial statement users do not receive the information
fair. Accountants have violated ethics porfesinya. Manipulation of the recording of the
incident that led to the financial statements of a broad impact on the business activities that
would not be fair to make government intervention to create new rules governing the
accounting profession with a view to prevent any practices that would violate ethics by public
accountants. Behavior and action ketidaketisan especially with regard to financial scandals
affected the confidence of investors and the decreasing activity of the world's stock markets
which caused stock prices. The main Keunci business success is his reputation as a
businessman who uphold the integrity and trust of others. So those who violate the ethics of
the case above for Sanctions penalty in Indonesia is still weak when compared to the
punishment in the U.S.. In America, the perpetrators of criminal sanctions in the financial
sector sentenced to 10 years in prison, while in Indonesia only sanctioned reprimand or
revocation of a license to practice the profession of accounting and business people should
consider the ethical standards for the benefit and sustainability of the business in the long run.
In this case we can draw the conclusion that there is the case of a miraculous case of
irregularities in the accounting professional ethics antanya are:
1. Professional responsibility
As a profesional and also as seoarang public accountant whose work required by the
accountant lain.dalam this case the work is not in accordance with the procedure and is not
responsible for this can be evidenced by the demise of the public accounting firm Arthur
Andersen named.
2. technical standards
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Of the case that it can be concluded that the existence of a public accountant who publishes
financial statements showing not meet technical standards to the detriment of interested
parties such as investors WorldCom itself.
3. objectivity
In this case the fraud occurred miraculous piihak-party presence felt in the lucrative and also
the injured party by the CPA itself.
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References
.Ferranti, Marc. Ex-WorldCom CFO Sullivan Gets Five Years in Jail. Computerworld Inc.,
12 August 2005.
Nationwide Speakers Bureau, Inc. Cynthia Cooper: WorldCom Whistle Blower. 2004.
Pappalardo, Denise. Ebbers Jail Time Put Off, For Now. Network World, Inc., 8 September
2005.
Reporter. Appeals Court Hears Ebbers Case: Judge Questions Ex-WorldCom Chief's 25-year
Sentence. Reuters, 30 January 2006.
Rovella, David E. JPMorgan to Pay $2 Bln to Settle WorldCom Fraud Suit. Bloomberg L.P.,
16 March 2005.
http://money.howstuffworks.com/cooking-books9.htm
http://www.worldcomfraudinfocenter.com/
http://yvesrey.wordpress.com/2011/02/10/kasus-skandal-akuntansi-pada-worldcom/
http://kartikatriperwirasari.wordpress.com/2010/06/01/world-com/
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