The Case of WorldCom

1172 Words3 Pages

Equal Pay for Equal Work

Ethics has been around since the first humans could understand the concept of right and wrong. More specifically in accounting the most ethical decision doesn’t always produce the most outcomes for a company. For example, falsifying documents or information to improve the overall image of the company to the public. For this reason one can see why someone might be tempted to this type of unethical behavior. WorldCom can be the perfect example of what can go wrong when these types of behaviors are going on within a business. Ethics provides a moral way for human behavior and without it society would not be able to function and would eventually fall apart. In WorldCom’s case this is exactly what happened.

WorldCom started out as Long Distance Discount Services (LDDS) a long distance telephone service provider from Mississippi 1983. Bernard Ebbers was selected as their CEO and with his help; WorldCom was placed as number 52 on the Fortune 500 Companies in 2001.( ) The company’s success came from their ability to provide an alternative to the major long distance carriers by tailoring service to each customers calling patterns. Through acquisitions of multiple companies allowed LDDS to grow at a very rapid rate. The fraud began in the late 1990’s; the company's revenue stream had slowed so the stock price of the company was falling. The company took 2.8 billion out of reserve that was meant to cover liabilities in some of the companies it had acquired, and then put that money into its revenue line in the financial statements.( ) By 1998, their stock was slowly declining. During 2001, Ebbers persuaded the board of directors to provide him corporate loans. Ebbers wanted to cover the margin, but the strategy ...

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