Show:
Auditor Liability
Accounting Issues
Stakeholder
Management
WorldCom Management
Accountability & Stewardship
100
Selling of both consulting and auditing services could result in this.
What is a conflict of interest?
100
Instead of treating line costs as expenses, WorldCom did this with the excess line capacity.
What is capitalized?
100
The interests of this stakeholder group were overlooked by WorldCom management.
Who are the Shareholders?
100
This management executive was quoted saying "I don't know accounting" and is now serving a 25-year prison term
Who is Bernie Ebbers (ex-CEO of WorldCom)?
100
This U.S. organizational body filed a civil suit of fraud against WorldCom.
What is the US Securities & Exchange Commission?
200
This was one of the measures introduced in order to ensure auditor independence.
What is rotation of lead audit partners? Or, What is prohibiting mixing of audit and other work?
200
This was one measure introduced by Sarbanes-Oxley to ensure that company management produced accurate financial statements.
What is personal certification of financial statements by C-suite?
200
This act raised the bar on corporate accountability and enabled regulators to severely punish fraudulent activity for the protection of all stakeholders.
What is the Sarbanes-Oxley Act?
200
Cynthia Cooper was considered to have been a "____"; someone who pointed out the issues at WorldCom.
What is a whistle blower?
200
The Expense/Revenue ratio was this type of measure for WorldCom
What is a short-term financial measure?
300
Arthur Anderson was convicted of this charge in relation to the WorldCom fraud.
What is obstruction of justice?
300
WorldCom had to write down $82 billion (or 75% of its assets) mostly due to this.
What is capitalization of line costs which did not have measurable future benefit?
300
Since the CEO of WorldCom laid out the agendas for the Board meetings, and led the Board in a certain direction, the Board of Directors lacked this.
What is independence?
300
This business function's influence and effectiveness was suppressed by WorldCom management.
What is the legal function?
300
Numerous acquisitions led to incompatibility of these systems at WorldCom.
What are the legacy accounting systems?
400
This board was introduced as part of the Sarbanes-Oxley Act in order to ensure that auditors were protecting public’s interests
What is the Public Company Accounting Oversight Board (PCAOB)?
400
World Com tried to reduce line expenses by performing this accounting procedure.
What is accrual releases or reversals?
400
This is what Bernie Ebbers asked the Board of Directors for when WorldCom share value started to decline.
What is a personal loan?
400
This is a practice whereby company executives sough to report smooth, regular increases in quarterly earnings to appear well-run and boost share price
What is earnings management?
400
This is one measure introduced by Sarbanes-Oxley in order to enhance stewardship.
What is whistle blower protection / increased penalties for securities fraud / limits personal loans to officers / codes of ethics / transparency regarding off-balance sheet financing / reporting of effectiveness on internal controls?
500
Arthur Andersen primarily focused on the risk that World Com revenues would be misstated because of errors or inaccurate records and not because of _________
What is deliberate misrepresentation?
500
In order to release accruals, this is the accounting entry that is required.
What is Debit Line Accruals and Credit Line Expenses.
500
These groups are primarily responsible for Stakeholder Management
Who is the Board of Directors and the C-level executives?
500
This is one way that company executive could manage earnings.
What is use of reserve funds / trade loading / incentives to encourage a customer to buy at a specific time?
500
WorldCom overstated its pre-tax income by this amount.
What is $7 billion dollars?