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Southern New Hampshire University *

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206

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Business

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Feb 20, 2024

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pdf

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Uploaded by ChefMouse2194

I chose to discuss the white-collar crime story WorldCom. They were known as one of the world's largest telecommunications firms until June 2002. The US second-largest long-distance telecommunications company confirmed that it had overstated its earnings, by classifying as capital expenditures those payments it was making for using the communications networks of other companies. WorldCom had cooked the books repeatedly including its income statement. I believe the CEO Bernard Ebbers who was sentenced to 25 years in prison was justly held criminally accountable. The fraud was implemented by and under the direction of WorldCom's Chief Financial Officer Scott Sullivan who was terminated and only received 5 years behind bars in which I think he was not justly helped criminally responsible for the roll that he played because he conducted much of the fraudulent activity I feel that he should have received just as much time as the CEO Bernard Ebbers. I also believe controllers David Myers who was able to resign from the company in which he directed the making of entries he knew were not supported and Arthur Anderson who missed several opportunities to determine misuse of accruals, the capitalization of line cost, and the improper recognition of revenue items. They were not responsible for the roles they played in the scandal, and all fingers were pointed at the company's CEO and CFO. Regarding businesses being able to regulate themselves to act ethically, government oversight is a requirement to safeguard the public from financial mismanagement. Also the government oversight ensures that each and every business is following all rules and regulations that are set forth to own or operate a business government is needed because there will be businesses that will not want to obey these rules and should suffer the consequences. References: The WorldCom Scandal (2002) (internationalbanker.com)

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