please reply to the following remarks regarding worldcom please have an understanding of worldcom and enron account scandals and than reply to the remarks below agreeing or disagreeing and giving a through explanation why
Please reply to the following remarks regarding worldcom please have an understanding of worldcom and enron account scandals and than reply to the remarks below agreeing or disagreeing and giving a through explanation why
I think the basis of WorldComâ€s case is greed. Greed caused more pressure within the company for excessive acquisitions and mergers and inappropriate accounting practices. The companyâ€s greed spread to related parties such as external auditors, banks, and analysts, and they all justified their wrongdoings and ignorance for their own profits. The company was doing great and being profitable by reducing expenses and providing good customer service before it grew too big too quickly. It is unfortunate that it forgot its beginning and could not maintain the core value of the company for customers, employees, and investors.
It was interesting that the textbook highlighted David Myers, WorldComâ€s controller instead of other key players like Bernie Ebbers and Cindy Cooper. It portraited a lot of emotions he went through during the time things started unveiling and it was easier to see his perspective. I wonder if many people would the same thing as he did to keep his boss happy and the job that had many incentives.
I would think that there were some links to both Enron and WorldCom audit failures, and they were both Andersonâ€s clients. Anderson might not have become too big and transformed to a consultant company instead of an audit firm and failed to perform adequate audits at different places. Both cases show that Anderson was not performing appropriately as an external auditor and they were just trying hard to keep the client happy. They knew that both companies had internal control issues, but they failed to point them out to be corrected. In the WorldCom case, they were fine with limited access to documents and systems. Maybe a lack of access might have caused them to spend more time running analysis instead of looking into the actual entries and supportive documents but they should have demanded access to their systems. If they had taken the right actions, they might have been fired by WorldCom much sooner, but they might have been able to warn possible financial issues to the public earlier.
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