By
Shirley Davis
Accounting Capstone: Senior Seminar in Accounting
Instructor: Wendy Peffley Achilles
feeling back at the corporate culture at WorldCom it was a disaster waiting to happen. Worldcom had an autocratic style of perplexity and followed a top down approach. Each department had its own rules and management style. There was no outlet for employees to express their concerns. Top pecking regularize was granted compensation and bonus beyond the family guide lineages to a select group of individuals based on their loyalty to them. (pp. 67)
umpteen speculate that as stock prices climbed, executives were under increasing bosom to meet higher and higher earnings expectations. If actual results were non as good as hoped for, some gave in to come-on and adjusted their numbers to meet market expectations.
Bernie Ebbers understood come up that what really mattered to Wall Street investors was not the underlying wellness of his company ontogeny but rather the value of the companys stock. If you were able to keep the stock price up, Ebbers calculated, everyone, or at least everyone who mattered, would be happy.
The banks would hop on visiting card; the analysts would give the company high ratings; the media would display you and your company in glowing reports; and the politicians would look the other way.
Ebbers was obsessed with revenue growth and insisted on a 42% E/R ratio. He encouraged managers to push for revenue, even if it meant that long term cost would out weigh the short term gains. As chore operations declined post the 1st quarter in 2000, chief financial officer Sullivan used the following accounting tactics to achieve targeted process:
1. Accrual quits: Accounting principles require companies to estimate expected payments from line costs and match them with revenues in the income statement. Throughout 1999 and 2000, Sullivan told staff to release accruals which too high...If you want to get a full essay, order it on our website: Ordercustompaper.com
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