Your ethics assignment is on the Worldcom accounting scandal. You are to answer the following answers completely and concisely. Please provide as much detailed, relevant, and important information as possible in your answers while adhering to the 2-3 page length of the assignment.
1) Research the Worldcom accounting scandal using the internet or other sources.
2) Worldcom misled investors, lenders, and other stakeholders by not following proper
Generally Accepted Accounting Principles. You are to describe the two primary ways
the company increased net income by violating GAAP.
3) In addition, Worldcom violated some of the accounting principles, assumptions and
qualitative characteristics we discussed in Chapter 1. Describe two of the other accounting principles, assumptions or qualitative characteristics that were violated. See pages 28-31 of our textbook and slides 26-27 from the Chapter 1 Powerpoint (in Blackboard) for assistance.
4) Before the accounting violations were discovered, they resulted in higher net income for the company. How did this higher net income benefit the following 2 stakeholders:
The bonuses of top executives
5) After the accounting improprieties were uncovered, they resulted in serious
consequences for several groups of stakeholders. Describe the penalties, punishment
and/or other negative repercussions to the following stakeholders:
Employees of the company
The company’s key executives: CEO Bernard Ebbers and CFO Scott Sullivan
Shareholders who owned Worldcom’s stock at the time the scandal was
Use Microsoft Word (“.doc” or “.docx”)
Font = Times New Roman 12 point font
Margins= one inch margins
You must cite a minimum of 4 sources
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