WorldCom’s Collapse And The Accounting Profession
The decade which came before the turn of the millennium was a period of great economic expansion for North America and the global community. Advances in communication and web technologies, changes in the nature of the global economy and a period of generally robust corporate growth would suggest limitless opportunities for Americans at every level of the economy. However, this period would also be characterized by widespread deregulation of corporate behaviors and entitlement. The would create an environment of corporate lawlessness. Companies and CEOs would commit many dishonest acts in terms of the presentation of financial outlooks, accounting realities and performance reports for major upstarts and long-standing, reputable financial firms alike. The turn to the 2000s would bring with it new circumstances such as those that would accompany the events of September 11th and a bevy of devastating revelations concerning the behaviors or America’s leading corporations. Across the next decade, Enron, Adelphia, Tyco, Nortel, Worlcom, Lehman Brothers, Merrill Lynch, Bear Stearns, AIG and Bernie L. Madoff Investment Securities LLC, just to name some of the most noted examples, would either fall into financial ruin after the revelation of massive corruption or would declare bankruptcy due to gross mismanagement. Among these, WorldCom is an instructive example of the accounting scandals that dismantled American economic growth over just a few years
At the time of its collapse, WorldCom was the single largest corporate bankruptcy declaration in American history. And the event of its collapse seems to have been foretold by a pointedly negative corporate culture. Highly decentralized and absent of any internal control mechanisms, Kaplan & Kiron (2007) report that the culture at WorldCom largely reflected that of American corporate culture on the whole. That is, an atmosphere of deregulation and poor administrative oversight would allow for a lack of accountability. This was particularly so in a legal regard. So indicates the text by Kaplan & Kiron, which finds that the company’s CEO, Bernard Ebbers was particularly resistant to any meaningful legal oversight. The article notes that “Ebbers did not include the company’s lawyers in his inner circle and appears to have dealt with them only when he felt it necessary. He let them know his displeasure with them personally when they gave advice — however justified — that he did not like. In sum, Ebbers created a culture in which the legal function was less influential and less welcome than in an healthy corporate environment.” (Kaplan & Kiron, p. 3)
According to the article by Kaplan & Kiron, the ambition to be the top earning company on the stock market produced a culture of aggressive growth orientation. This was precipitated on the idea of ever-increasing revenues. It is thus that, in the face of the market downturn to which the whole global community has been exposed, Ebbers and his cronies began to project earnings according to this ambition rather than the reality. The reality was that a company which aspired to be “the No. 1 stock on Wall Street” was instead steadily bleeding money while claim growth in the billions.
The pressure placed upon accountants at WordCom was reflective of the pressure facing accountants throughout the economy during this period of widely absence securities oversight. Indeed, the relationship between regulation and accounting is essential, and this diminished link would have catastrophic implications for the profession as a whole. Such is shown by the Scott text, which tells that “efficient securities market theory has major implications for financial accounting. One of these is that supplementary information in financial statement notes or elsewhere is just as useful as information in the financial statements proper. Another is that efficiency is defined relative to a stock of publicly known information. Financial reporting has a role to play in improving the amount, timing, and accuracy of this stock, thereby enabling capital markets to work better and improve the operation of the economy.” (Scott, 115)
The reverse is also true. Weak and disinterested Securities oversight produces the type of financial reporting deception that fueled individual wealth at the expense of the economy. Today, the accounting profession has seen a significant amount of discredit, with the regulatory conditions of Sarbanes-Oxley demonstrating the public will to impose greater oversight on this profession. We are also inclined to note that greater encouragement and protection must be created to facilitate whistle-blowing where appropriate. (Skeel, 110) Given that thousands of WorldCom employees saw their pension plans frittered away by the gross criminality of their core leadership, we can see that the motivation to serve as a whistleblower should inherently be the preservation of one’s job security.
These recommendations are a demonstration of the necessity for honest and transparent financial reporting and internal communication. Ultimately though, we also conclude that the current American corporate culture remains far too unregulated. Therefore, a proper step would be the governmental placement of strict limitations and conditions on the bonuses which can be awarded to corporate CEOs based on company performance, with some level of proportion to internal salaries being used to determine this. Legislation is recommended to create parameters that restrain the corruptive impulses of these CEOs while simultaneously respecting the value of free market behaviors. In the absence of these, greedy CEOs such as Ebbers can distort the market and create a chain reaction of economic events that, in this case, have plunged us into a depression.
Kaplan, R.S. & Kiron, D. (2007). Accounting Fraud at WorldCom. Harvard Business School.
Scott, W.R. (2006). Financial Accounting Theory, 4th Ed. Pearson-Prentice Hall.
Skeel, D. (2005). Icarus in the Boardroom: The Fundamental Flaws in Corporate America and Where They Came From. Oxford University Press.
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY!!!
We provide professional writing services to help you score straight A’s by submitting custom written assignments that mirror your guidelines.
Get result-oriented writing and never worry about grades anymore. We follow the highest quality standards to make sure that you get perfect assignments.
Our writers have experience in dealing with papers of every educational level. You can surely rely on the expertise of our qualified professionals.
Your deadline is our threshold for success and we take it very seriously. We make sure you receive your papers before your predefined time.
Someone from our customer support team is always here to respond to your questions. So, hit us up if you have got any ambiguity or concern.
Sit back and relax while we help you out with writing your papers. We have an ultimate policy for keeping your personal and order-related details a secret.
We assure you that your document will be thoroughly checked for plagiarism and grammatical errors as we use highly authentic and licit sources.
Still reluctant about placing an order? Our 100% Moneyback Guarantee backs you up on rare occasions where you aren’t satisfied with the writing.
You don’t have to wait for an update for hours; you can track the progress of your order any time you want. We share the status after each step.
Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.
Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.
From brainstorming your paper's outline to perfecting its grammar, we perform every step carefully to make your paper worthy of A grade.
Hire your preferred writer anytime. Simply specify if you want your preferred expert to write your paper and we’ll make that happen.
Get an elaborate and authentic grammar check report with your work to have the grammar goodness sealed in your document.
You can purchase this feature if you want our writers to sum up your paper in the form of a concise and well-articulated summary.
You don’t have to worry about plagiarism anymore. Get a plagiarism report to certify the uniqueness of your work.
Join us for the best experience while seeking writing assistance in your college life. A good grade is all you need to boost up your academic excellence and we are all about it.
We create perfect papers according to the guidelines.
We seamlessly edit out errors from your papers.
We thoroughly read your final draft to identify errors.
Work with ultimate peace of mind because we ensure that your academic work is our responsibility and your grades are a top concern for us!
Dedication. Quality. Commitment. Punctuality
Here is what we have achieved so far. These numbers are evidence that we go the extra mile to make your college journey successful.
We have the most intuitive and minimalistic process so that you can easily place an order. Just follow a few steps to unlock success.
We understand your guidelines first before delivering any writing service. You can discuss your writing needs and we will have them evaluated by our dedicated team.
We write your papers in a standardized way. We complete your work in such a way that it turns out to be a perfect description of your guidelines.
We promise you excellent grades and academic excellence that you always longed for. Our writers stay in touch with you via email.