Review of Accounting Ethics – Worldcom
ACC557 Financial Accounting
Cornelia L. Brown
Review of Accounting Ethics - Worldcom
In a business world forced to meet organizational objectives such as high earnings growth it is not alarming that conduct by decision makers may be regarded as doubtful practices. These types of practices in the past twenty years have resulted in a number of agencies finding themselves confronted with ethical dilemmas plus the aftermath of stock selling price declination, corporate demise and costly lawsuit. Worldcom is usually one of those businesses that discovered itself through this predicament mainly because it announced filing for personal bankruptcy in September of 2002. (Thibodeau and Freier)
Worldcom evolved from Extended Distance Price cut Services (LDDS), a long-distance provider that connected cell phone calls between neighborhood telephone firms. In mil novecentos e noventa e seis the Telecommunications Act allowed long-distance companies to enter the area telephone providers and other telecoms services, including the Internet. Throughout the next four years the organization embarked on an aggressive obtain strategy to expand into these types of markets.
The acquisitions included the following telecommunication companies: MFS and UUNET (1996), Brooks Fiber Homes, CompuServe Firm, ANS Marketing communications and MCI (1998); Skytel and Short (1999). Although the Sprint merger failed, Worldcom became the second-largest telecommunications provider in the United States. During this time duration year over year income growth was 50 percent in 16 of 23 quarters. (Thibodeau and Freier)
In 2000, Worldcom started to face difficulties such as improved competition, reduced rate of growth, decrease in share prices and downturn popular, particularly the Net. The expense in network capacity outweighed consumer demand. The ratio of bills to revenues increased since industry earnings and share prices decreased.
As being a decision machine what takes place when confronted with the...
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