Abstract:
A small telecommunication company by the name of long distance discount
service, was started in 1983 by Bernard Ebber. By acquisition of many other small
companies it grew large such that it became second largest telecommunication
company in early 90's.It acquired almost 60 companies including large companies
which were main competitor like MCI. After this much number of acquisition,
company changed its name to WorldCom. Company was quite popular in media as
it had significant control over the internet and other telecommunication services. In
late 90's telecommunication industry suffered from a downturn but Ebber was
determined to maintain WorldCom's position in the market. So in order to not let
the share price of WorldCom go down, WorldCom manipulated its accounts and
instead of showing losses, which was the actual picture, Company showed profits.
Company was able to practice this fraudulent accounting till mid of 2002 till the
fraud was discovered by internal auditors of WorldCom. This was the biggest fraud
ever done in the history.
