WorldCom Essay Example for Free

WorldCom Essay This paper explores the Accounting fraud that took place at WorldCom. Three aspects of the corporate culture are discussed including WorldCom’s harsh top-down management approach, the lack of written rules or a code of conduct, and the inaccessibility of many of WorldCom’s departments. The CEO’s desire to be the #1 stock on Wall Street is also discussed. WorldCom’s inappropriate booking and releasing of accruals is explored and proper accrual accounting procedures are stated. Three aspects of whistleblowing are discussed, including saving a company from a destructive end, facing public reprisal, and potential legal effects. Arthur Andersen is then used to explore the credibility of the Accounting profession when corporate fraud is unveiled. Keywords: WorldCom, fraud, accruals, whistleblowing WorldCom The corporate culture at WorldCom was one that was very loose. Although several factors contributed to the loose and unhealthy environment at WorldCom, one of the greatest downfalls of the corporate culture was the harsh top-down management approach. Employees were advised to do as they were told without questioning management. In addition, CEO Bernard Ebbers and CFO Scott Sullivan dabbled in too many affairs that should have been handled by lower-level management. Too often they ordered overrides of basic procedures that resulted in the downfall of WorldCom. Orders were issued that resulted in the override of accounting procedures. This greatly contributed to the fraud. Another factor that contributed to the unhealthy corporate culture at WorldCom was the fact that no written rules or code of conduct existed. The CEO himself thought it was a waste of time. This paired with the harsh top-down management approach seemed to create a lack of internal control as well. There were no real company rules and managers were completely capable of overriding any rules that may have existed. The inaccessibility of other departments may have contributed to the fraud as well. With so many corporate headquarters, key personnel who may have detected the fraud sooner were not able to confirm that anything wrong was taking place. If a key manager from the finance department in Mississippi, a key manager from the human resources department in Florida, a key manager from the legal department in Washington, D. C. , and a key manager from the network operations department in Texas been together at any point in time, worked together in the same building, or even had the appropriate means to communicate (cell phones were not a hot commodity like they are today and e-mail was just starting to take flight), it is possible that WorldCom could have been saved from its fraudulent end. The CEO’s desire to be the #1 stock on Wall Street was the main source of the fraud. He was so driven to be on top that he ordered managers to engage in inappropriate accounting procedures that included maintaining a certain expense-to-revenue ratio at all costs, releasing accruals, and capitalizing expenses. Furthermore, his top leadership instructed employees about what information could and could not be disclosed with the external auditors. Employees were cursed and threatened if they disclosed anything that was perceived to be a threat to his plan of being the #1 stock on Wall Street. According to Beresford, Katzenbach, and Rogers, Jr. 2003), â€Å"WorldCom manipulated the process of adjusting accruals in three ways. First, in some cases accruals were released without any apparent analysis of whether the Company actually had excess accruals in its accounts. Thus, reported line costs were reduced (and pre-tax income increased) without any proper basis. Second, even when WorldCom had excess accruals, the Company often did not release them in the period in which they were identified. Instead, certain line cost accruals were kept as rainy day funds and released to improve reported results when managers felt they were needed. Third, WorldCom reduced reported line costs by releasing accruals that had been established for other purposes— in violation of the accounting principle that reserves created for one expense type cannot be used to offset another expense† (p. 69). According to Investopedia, â€Å"†¦economic events are recognized by matching revenues to expenses (the matching principle) at the time in which the transaction occurs rather than when payment is made (or received)† (para. 1). Thus, accruals are booked when transactions occur. Accruals are released when either payment is made or when they are evaluated and deemed to be in excess of the actual accrual. Accruals of one type should never be released to offset another type. Accruals should also be released in the period they are identified. While whistleblowing may seem like a relatively easy concept to some, it really is not. The decision between doing the easy thing and doing the right thing usually is not easy. For instance, a person could report fraudulent activity that is taking place within an organization, whether it is due to corruption, misappropriation of assets, financial statement fraud, or another type of fraud. However, such a decision could carry a great price tag. Not only could it lead to the complete destruction of a company, but it could cost other employees their benefits, their retirements, and their jobs. One of the pros of whistleblowing is the fact that a company could be saved from certain destruction, as in the case of WorldCom. It is possible that the sooner fraudulent activity is reported, the less negative the outcome could be. However, whistleblowers are often perceived as tattle tales and snitches and sometimes face public reprisal, as was the case with WorldCom’s Cynthia Cooper. Another downside is the potential legal effects of whistleblowing. According to Wikipedia, â€Å"†¦most whistleblower protection laws provide for limited make whole remedies or damages for employment losses if whistleblower retaliation is proven. However, many whistleblowers report there exists a widespread shoot the messenger mentality by corporations or government agencies accused of misconduct and in some cases whistleblowers have been subjected to criminal prosecution in reprisal for reporting wrongdoing† (Common Reactions section, 4). The consequences of whistleblowing may prove to be steep. The credibility of the Accounting profession is put in jeopardy when corporate fraud is unveiled. As a result of the WorldCom fraud, Arthur Andersen was ordered to cease practicing before the Security and Exchange Commission by August 31, 2002. According to Wikipedia, â€Å"†¦the damage to the Andersen name was so severe that as of 2010[update], it has not returned as a viable business even on a limited scale. There are over 100 civil suits pending against the firm related to its audits of Enron and other companies. In addition, its reputation was so badly tarnished that no company wanted Andersens name on an audit. Even before voluntarily surrendering its right to practice before the SEC, it had many of its state licenses revoked† (Demise section, 1). As stated by Charles Niemeier (2001), â€Å"A loss of confidence can cause even a company with solid core operations to fail. That is because the negative impact of a lack of credibility can be far greater than the sum of the misstatements in the financials† (The Dangers of Smoothing section, 7). References http://www.investopedia.com/terms/a/accrualaccounting.asp http://owl.english.purdue.edu/owl/resource/560/01/ http://en.wikipedia.org/wiki/Arthur_Andersen http://fl1.findlaw.com/news.findlaw.com/wsj/docs/worldcom/bdspcomm60903rpt.pdf http://www.sec.gov/news/speech/spch529.htm http://en.wikipedia.org/wiki/Whistleblower

Vitamins Facts :: essays research papers

VITAMINS Vitamins, a group of organic substances required in our diets in small amounts for growth and nutrition, are usually found in foodstuffs or taken as supplements. Yet vitamins probably present a wider gap between myth and reality in the layman's understanding than almost any other area of our diet. Surveys have found that while a majority of Americans do take vitamin supplements on a regular or occasional basis for reason of health concerns, there exists enormous confusion about the actual purpose and benefits of this practice ("Use of Vitamin and Mineral Supplements in the United States," 1990:161). Most people have a recognition that Vitamin C prevents scurvy, that Vitamin A is found in fish-liver oils, or that Vitamin D is found in dairy products; many people believe that Vitamin E preserves youth and prevents sterility, or that Vitamin C can present colds and cancer. Beyond this, however, there is still considerable ignorance and widespread myth. The reality behind the common practice of taking vitamin supplements is less dramatic, although vitamins do represent an important component of the necessary human diet. The word vitamin was formed from the Latin word for life, "vita," and the Greek word "amine", because 19th century scientists believed that they were formed only from amino acids. Amino acids are the twenty essential code elements which arrange themselves in varied sequences or chains to form complex proteins, the basic foodstuff of life. These organic acids (containing the essential ingredient NH2), in conjunction with the nucleic acids (DNA material being composed of the four bases adenine, guanine thymine and cytosine), "translate" the genetic instructions from the DNA of the chromosome to the RNA transcript, and in turn transfer these instructions from the transcript to proteins. If proteins are the building blocks of life, then amino acids are the building blocks of proteins. Plant cells form amino acids from the compounds which the plant draws up from the ground, such as the nitrates and ammonia salts. Animals, however, cannot perform this conversion of simple inorganic substances to amino acids, so they must ingest them in the form of food-- with herbivorous animals consuming plant proteins in vegetables and carnivorous animals consuming animal proteins in the bodies of their prey. Vitamins are essential aids in many body processes, converting food the energy, building and maintaining cells, and other functions. Vitamins can thus be looked at as a crucial ingredient in a the long-term maintenance of health.

The Power of Knowledge

The Power of Knowledge Our present day cabinet of curiosities (the â€Å"Cabinet†) is akin to early modern representations, which contained a vast range of objects representing the power of divine creation, in that the Cabinet represents, through its display of five objects, the power of human knowledge. Each of these objects helps mankind acquire and/or use knowledge.The order of objects displayed has been designed to reflect the evolution and utilisation of knowledge: an illustration of the DNA spiral helix (the building blocks of life); seed samples (the growth and development of organisms); the electron icroscope (allowing detailed examination of objects); the tablet-style computer (the dissemination and democratisation of knowledge); and the moon rock (exploration of space). DNA Spiral Helix The deoxyribonucleic acid (DNA) helix is the only object in the Cabinet which is a representation.Whilst DNA exists in every cell it would need the Electron Microscope to render DNA v isible. Two strands are shown twisted into a helix with rods between the strands. How does this represent DNA? Phillip Cohen (2006) describes the helix thus: Each strand spells out the genetic code as a chain of four chemical letters alled bases: adenine (A), thymine (T), cytosine (C) and guanine (G). A,C,G and T sit on the rods between the two strands which are made from a sugar molecule and a phosphate molecule (Genetics Home Reference, 2013).The discovery of DNA and the evolving knowledge of it, has proved immensely powerful because of what it enables us to do, for example: to detect a criminal's guilt from a single hair beyond reasonable doubt; detect family connections by comparing DNA from two or more people, dead or alive; (hence the certainty that it was Richard Ill's remains found in Leicester); and to give the power to cure or eliminate previously incurable diseases, through the mapping of the human genome.Seed Samples Seed samples appear on the shelves at the seed bank of The International Maize and Wheat Improvement Centre, labelled in see-through closed plastic containers. The first seed bank was established by N. Vavilov in 1926 outside St. Petersburg, for scientific research and cross-breeding purposes (BBC, 2013). Since then the world has changed dramatically, resulting in an increased consumption of natural resources. Seed banks around the world have assumed a new and very important ole in the preservation of rare and dying species of all kinds of plant forms.Today the Millennium Seed Bank in Kew Royal Botanic Gardens is working on the ‘Noah's ark project and has acquired ten percent of the world's plant species threatened by climate change and the expansion of human habitats (Kew, nd). Seed samples preserved by seed banks provide not Just the opportunity for detailed study but also the power, opportunity and possibility for future generations to preserve most of the plant forms in the world (as we know it now) and to regenerate species to help feed the growing world population. An Electron Microscope This electron microscope is linked to three computer screens, showing typhoid bacteria in pink.Invented in 1 by German natural philosophers Max Knoll and Ernst Ruska, the electron microscope, though cumbersome and expensive is â€Å"capable of high magnification and greater resolving power than a light microscope† Oohn Innes Centre, 2013). Its capability to magnify finer details by two million times, revolutionised the studies of the behaviour and treatment of light resistant bacteria (such as typhoid bacteria) and viruses and enables detailed forensic analysis to take place. This object symbolises man's quest not only to understand his natural environment, but his ambition to control and manage it.The micrographs are artefacts in their own right; they can be displayed on their own as scientific evidence. The electron microscope can be displayed alone in a science museum, as a demonstration model for public use or in the Cabinet with the other four items chosen, to show the prominence and ever-increasing possibilities of technology and science and to illustrate man's evolving knowledge. A Tablet Computer Tablet-style computers combine several electronic components, such as a computer, amera and hand-held gaming device, into one convenient portable package (Martin, 2013) which is affordable for many consumers.The invention of the personal computer allowed individuals to access academic libraries and newspapers/ magazines via the internet (Slaughter, 2010) and (eventually) to communicate with other users, subject to a web connection. A tablet computer allows access to a wealth of information. A search engine acts as a filter to any subject; this enables appropriate content to be accessed. The rising popularity of internet-enabled phones, results in thousands more opportunities to access and create data being pened up. This technology enables knowledge to be shared and democratised – no longer resting with a narrow elite (Slaughter, 2010).The tablet computer incorporates a camera to allow for the quick transfer of photographs and videos around the world. The camera can challenge and record human behaviours: this ability to provide a contemporaneous record of human behaviour has resulted in the power of Governments to dictate the historical record of events being publicly challenged. Early computers also helped plot the course to the moon of the Apollo 11 flights in 1969. (Taylor, 2013). A Piece of Rock from the Moon Moon rocks are of various shapes and sizes and â€Å"range in age from about 3. billion years up to about 4. 5 billion years old† (Museumwales, 2009). A wealth of previously unknown knowledge has been gained from studying these rocks, they have â€Å"been of great value in advancing our understanding of the Moon and the history of our solar system† (Astro. washington, 2009). Scientists believe that earth rocks and moon rocks were once e ither part of the same body or were originally combined before they were formed (Natural history museum, nd). On religious grounds, this could challenge raditional views on God's formation of the earth.Moon rocks can be exhibited on their own as artworks – as natural art that reflect the universe in a microcosmic form in accordance with the Chinese tradition of the Philosopher Stones (BBC News, 2012). Moon rocks are priceless due to their scarcity, given the high cost of returning to the Moon to obtain more. In conclusion, the Cabinet symbolises the startling possibilities of human potential and the evolution of knowledge. The discovery of DNA and the creation of the Electron Microscope enabled, in their turn, turtner discoveries and developments to ake place. Conversely, the collection of seed samples allows for the preservation of what currently exists. 0 The tablet computer encapsulates the democratisation of knowledge, through ever-increasing access to data. 0 The moon ro cks represent the ambition to move beyond the world and the infinite possibilities of exploring and understanding our universe. 0The Cabinet is designed to inspire awe in the observer through the display of symbols of the technological and scientific progress that has led to a better understanding of our world and beyond.

Persuasive Essay Global Warming - 1201 Words

The Topic I am interested in pursuing for the persuasive essay is about The Global Warming. I am interesting in this Topic because I learned from my past experience working for The State Parks in Florida as a Park Ranger; by helping everyone to understand that we need to take care our environment by contribute to help â€Å"Mother Earth†; in addition, Global Warming is a slow increment in the general temperature of the world’s air for the most part credited to the â€Å"Greenhouse† impact brought about by expanding levels of carbon dioxide, chlorofluorocarbon, and different contaminations chemicals; what’s more, I concur that this is going on at this moment and the normal worldwide temperature has expanded at the quickest rate in writing history. There has been much discussion recently about Global Warming, so you can see it on media, news, etc†¦ By the way, and do you know what the causes behind this huge matter are? The word â€Å"Global Warmingâ⠂¬  divides in two: â€Å"Global† means something above borders or international and â€Å"Warming† means an alarm that something bad will happen; therefore, society needs to wake up and realize this matter that it is happening now in days, because the increment of the Carbon Dioxide (CO2) is more and more. Like I said before, I pick up this Topic because I want to change peoples minds so they can do something about our environment; in addition, I really want to get a job that I can help with the environment of the company and explain the circumstances andShow MoreRelatedPersuasive Speech on Global Warming Essay646 Words   |  3 PagesPERSUASIVE SPEECH ON GLOBAL WARMING by: Jennifer Zelmer Introduction: We all know about global warming, but do we really care or try to do at least some of the things that will help stop it or at least slow it down? 1) Over the last century our planets temp. has risen 1 degree. 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