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Share via Email What did WorldCom say? WorldCom now says it must issue revised financial statements for and as well.
Is there a Accounting mba worldcom twist to the latest disclosures? Companies set aside reserves to cover estimated losses such as uncollected payments from customers and judgements in lawsuits and other expected costs. Are reserves normal business practice?
It is a perfectly legitimate practice, like setting aside funds for a rainy day. But reserves can be abused to create the accounting equivalent of a slush fund.
If a company wanted to massage profits to meet Wall Street expectations it can transfer the necessary sums from the reserve. The suspicion is that WorldCom deliberately inflated its reserves to be able to dip into them to boost profits in order to meet profit projections.
Who is to blame? WorldCom's chief executive, John Sidgmore, blamed the company's former chief financial officer, Scott Sullivan, and the former controller, David Myers. The pair were arrested in New York, handcuffed and paraded in front of TV cameras as part of the Bush's administration crackdown on corporate crime.
Charged with securities fraud, conspiracy and other charges, they face 65 years in prison. WorldCom's founder and former chief executive, Bernie Ebbers, says he was unaware of the accounting problems, and has not been charged. What is wrong with filing expenses as investment? Operating expenses must be subtracted from revenue immediately, while the cost of capital expenses can be spread over time.
Improperly spreading operating costs inflated WorldCom's profits. Why did WorldCom's accountants not spot the problem? WorldCom's accountants at the time were Arthur Andersen, the same people that looked after Enron's books as well as other companies hit by accounting issues - Tyco, Global Crossing and Adelphia.
Andersen accused Mr Sullivan of withholding information from them. The deputy US attorney general, Larry Thompson, said: It will be virtually impossible to get an accurate picture until a comprehensive audit for the past several years is done, a process expected to last months.
The company is also under investigation by the department of justice and the securities and exchange commission, the US financial regulator.
Any other bad news? One of the largest write-offs in corporate history, that would amount to the gross domestic products of Hungary and the Czech Republic.The dark side of transfer pricing: Its role in tax avoidance and wealth retentiveness.
The controller oversees the accounting operations of a company. This senior position generally requires years of proven experience in various levels of accounting. A controller's job duties span a. Mr. Gravitt has over 25 years of experience in business valuation, commercial and personal damages assessment, investigative accounting and financial advisory services. Objectives At the end of the course, the students are expected to: a. be equipped with the understanding of what the users of accounting information need to know about accounting; b. appreciate the accounting process and its logical analysis of business transactions in the context of business peculiarities; and, c. develop their analytical ability in using accounting information as an aid in decision-making process. III.
Stolen Without A Gun: Confessions from inside history's biggest accounting fraud - the collapse of MCI Worldcom Hardcover – September 1, The world’s most infamous accounting scandal was the bankruptcy of Enron in The energy trader’s unfathomable accounts had obscured huge debts stashed off its balance sheet.
Financial Accounting [Wanda A. Wallace] on webkandii.com *FREE* shipping on qualifying offers. Financial Accounting presents accounting concepts and principles using explanatory materials, demonstration problems and chapter-end materials based on real companies' financial statements.
Articles from the financial press are integrated . January 22, | Hudson Admin. January 22, | Hudson Admin. January 22, | Hudson Admin.
The great expectations gap What is an audit for?. Lawmakers, auditors, investors and courts all have different expectations.