A CASE STUDY IN ACCOUNTING ETHICS AT WORLDCOM

A. INTRODUCTION

On 21 July 2002 the second largest telecommunications company in the U.S.,

WorldCom, Inc., applied for bankruptcy protection. WorldCom failed because of the bad

business decisions of its executives to manipulate earnings with improper accounting entries.

The key executives involved in the fraud were CEO Bernard Ebbers and CFO Scott Sullivan.

The accountants who were pressured by Ebbers and Sullivan to prepare improper accounting

entries included Director of General Accounting Bufford Yates, Controller David Meyers,

Director of Legal Entity Accounting Troy Norman, and Director of Management Reporting

Betty Vinson. Each was convicted of securities fraud and received federal jail sentences,

including billionaire Bernie Ebbers who received a 25-year sentence in federal prison.1 Betty

Vinson received a 5-month jail sentence.

Another key player in this sad story of greed and conflicting loyalties is Vice

President of Internal Audit Cynthia Cooper, a whistleblower who with two other internal

auditors, Gene Morse and Glyn Smith, doggedly investigated and revealed the fraud to

WorldCom’s audit committee.

In this case study you will read about the ethical pressure faced by Betty Vinson and

Cythia Cooper as they each balanced conflicting loyalties between family, employer, and

profession. Betty first balked then caved to the pressure and ruined her career; Cynthia did

not cave and was named one of three “Persons of the Year” by Time Magazine in 2002 for

her moral courage at WorldCom (Lacayo and Ripley 2002).

'

1Faber, David. The Rise and Fraud of WorldCom. CNBC, 8 September 2003.

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In December 2005, two years after this case was written, the telecommunications

industry consolidated further. Verizon Communications acquired MCI/WorldCom and SBC

Communications acquired AT&T Corporation, which had been in business since the 19th

Century. The acquisition of MCI/WorldCom was the direct result of the behavior of

WorldCom's senior managers as documented above. While it can be argued that the demise

of AT&T Corp. was not wholly attributable to WorldCom's behavior, AT&T Corp.'s

decimation certainly was facilitated by the events surrounding WorldCom, since WorldCom

was the benchmark long distance telephone and Internet communications service provider.

Indeed, the ripple effect of WorldCom's demise goes far beyond one company and several

senior managers. It had a profound effect on an entire industry.

This postscript will update the WorldCom story by focusing on what happened to the

company after it declared bankruptcy and before it was acquired by Verizon. The postscript

also will relate subsequent important events in the telecommunications industry, the effect of

WorldCom's problems on its competitors and labor market, and the impact WorldCom had on

the lives of the key players associated with the fraud and its exposure.

B. WorldCom Case

Worldcom was originally a company long distance telephone service provider. During

the 90s the company was doing some acquisitions of other telecom companies who then

increase pendapatnnya of $ 152 million in 1990 to $ 392 billion in 2001, which in turn puts

WorldCom in position 42 of the 500 other companies Majah's version of fortune.

Acquisitions that have taken place in 1998 when the company took over MCI

worlcom the second largest in the U.S. peruahaan engaged in long-distance

telecommunications. And in the same year the company bought Worldcom UUNet,

Compuserve, and AOL data networks (American Online) which confirmed the position of the

operator Worldcom became No. 1 in the Internet infrastructure.

In 1990 occurred the fundamental problems in the economy that is too large capacity

Worldcom telecom. This problem occurs because in 1998 U.S. economic recession that

reduced demand for the infrastructure of the Internet's impact on revenue drastis.hal

Worldcom pendpatan dropped dramatically so this is far from the diharapkan.padahal for

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acquisition costs and to finance infrastructure investments Worldcom use of funding sources

outside or debt.

Worldcom is not the only company that has financial problems pda that time, other

companies are experiencing financial problems between lainQwest Communications, Global

Crossing, Adelphia, Lucent Technologies, and Enron. Tersebuit companies have invested

heavily in the internet business. As in the earlier company Worldcom investors suffered huge

losses. Worldcom company's stock market value fall from about 150 billion dollars (January

2000) to around $ 150 million (1 July 2002). The state attempted mebuatan management

accounting practices to avoid the bad news.

Accounting Practice

In its report on June 25, Worldcom admitted that the company classifies more than $

3.8 billion for the network load as the network is spending modal.beben load kepda

Worldcom paid by other companies for telecommunication networks, such as the cost of

access and messaging cost for Worldcom. Reported approximately $ 3.005 billion has been

one diklasifiksi in 2001, while the remaining approximately $ 797 million in the first quarter

of the data 2002.berdasarkan pad Worldcom $ 14.7 billion in 2001 served as an expense.

By moving expense accounts to capital accounts, Worldcommampu raise revenue or

profit. Worldcom able to increase profits through expense account recorded lower, while

higher asset account is recorded as capitalized expenses are presented as an investment

expense. If it is not detected this practice will result in a lower net income in the years

brikutnya. Because the network load capitalization will didepresiasikan.secara essence

capitalization load network will enable the company to allocate biyanya in a few years in the

future, maybe between 10 years and even more.

Worldcom accounting staff were interviewed before 25 June. In March 2002 the SEC

requesting data from the company in the form of items related to the Financial Statements. It

includes:

1. sales commissions and bills are problematic

2. administrsi sanctions against income berhubungn with customers in a large scale

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3. accounting policies for merger

4. loans to the CEO

5. integration of computer systems with MCI Worldcom

6. analysis of the expected revenue shares WC

July 1, 2002 WorldCom announced that the reserve account at Worldcom also

investigated / examined. Company made this account to anticipate extraordinary events that

can not be predicted. Such as tax debt next year. Seharusnyaakun should not be manipulated

to earn an income.

August 8, Worldcom admitted that they had used the allowance account are not true.

Indictments were reported on the 28th of August is that the reduced reserve account to cover

the cost of the network that has been capitalized.

Audit questions

Based on this background, the presentation of the network load as capital

expenditures ditemukanoleh internal auditor Cynthia Cooper. The auditor Cynthia Cooper in

May 2002 to discuss the matter to the chief financial officer Scott D. Worldcom Sullivan and

corporate controller at the David F. Myers. Cooper reported the matter at the head of the audit

committee Max Bobbitt, around June 12. Which then Max Bobbitt asked KPMG as external

auditor to conduct an investigation at that time.

WorldCom chief financial officer are required to correct the misstatements / incorrect

classification. After further discussion Scott D. Sullivan dismissed the announcement held at

Worldcom. On the same day David F. Myers resigned. Reported that Sullivan had never

consulted presentation to the External data Artuhr Anderson as auditor in 2001. and Arthur

Anderson also stated that Sullivan was never consulted him.

On July 15, Tauzi which is the House Energy and Commerce Committee, said that

based on internal documents and emails Worldcom executives indicate that the actual

misstatement already know that since the beginning of summer 2000.Internal auditors are the

initial defense against errors paktek-accounting practices and accounting fraud. One question

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to the Internal Auditor Worldcom is why it took a long time (1 year) to uncover these

misstatements. Though considering that so large capitalization value and its effect on the

value of net income and total assets harusnnya could be expressed faster.

Questions heavier dilyangkan the Arthur Anderson accounting firm, some observers

claim that Arthur Anderson knew about the misstatements made Worldcom. Because Arthur

Anderson should be tasked to audit such mistakes, especially mistakes is very material. Some

observers also claim that Arthur Anderson should have been more sensitive to Worldcom's

financial condition, which could result in the company's management melakuakan case

beyond reasonable accounting practices.

Impact

June 25, 2002, Worldcom stock of $ 64.5 in mid-1999 to less than $ 2 per share. And

fell again to less than $ 1 a share value ultimately less than 1 cent. Worldcom employees who

have company stock as part of their pension funds also suffered losses. At the end of 2000

approximately 32% or $ 642.3 million of their pension in the form of saham.Dan announced

it would lay off 17,000 employees out of a total of 85 thousand employees.

July 21, 2002, Worldcom bankruptcy protection while the program of the United

States justice department. Worldcom reported assets of $ 103 billion with total debt of $ 41

billion. Worldcom bankruptcy was the biggest bankruptcy in United States

In 2004 the name changed mnjadi MCI Worldcom, and Worldcom CEO Ebbers be

changed from john Sidgemore. Scott D. Sullivan was charged with a maximum prison

sentence of 25 years in prison while Ebbers was charged with a prison sentence of more than

25 years.

From Benchmark to Bankrupt

Between July 2002 when WorldCom declared bankruptcy and April 2004 when it

emerged from bankruptcy as MCI, company officials worked feverishly to restate the

financials and reorganize the company. The new CEO Michael Capellas (formerly CEO of

Compaq Computer) and the newly appointed CFO Robert Blakely faced the daunting task of

settling the company's outstanding debt of around $35 billion and performing a rigorous

financial audit of the company. This was a monumental task, at one point utilizing an army of

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over 500 WorldCom employees, over 200 employees of the company's outside auditor,

KPMG, and a supplemental workforce of almost 600 people from Deloitte & Touch. As

Joseph McCafferty notes, "(a)t the peak of the audit, in late 2003, WorldCom had about 1,500

people working on the restatement, under the combined management of Blakely and five

controllers…(the t) otal cost to complete it: a mind-blowing $365 million"(McCafferty,

2004).

In addition to revealing sloppy and fraudulent bookkeeping, the post-bankruptcy audit

found two important new pieces of information that only served to increase the amount of

fraud at WorldCom. First, "WorldCom had overvalued several acquisitions by a total of $5.8

billion"(McCafferty, 2004). In addition, Sullivan and Ebbers, "had claimed a pretax profit for

2000 of $7.6 billion" (McCafferty, 2004). In reality, WorldCom lost "$48.9 billion (including

a $47 billion write-down of impaired assets)." Consequently, instead of a $10 billion profit

for the years 2000 and 2001, WorldCom had a combined loss for the years 2000 through

2002 (the year it declared bankruptcy) of $73.7 billion. If the $5.8 billion of overvalued assets

is added to this figure, the total fraud at WorldCom amounted to a staggering $79.5 billion.

Although the newly audited financial statements exposed the impact of the

WorldCom fraud on the company's shareholders, creditors, and other stakeholders, other

information made public since 2002 revealed the effects of the fraud on the company's

competitors and the telecommunications industry as a whole. These show that the fall of

WorldCom altered the fortunes of a number of telecommunications industry participants,

none more so than AT&T Corporation.

The CNBC news show, "The Big Lie: Inside the Rise and Fraud of WorldCom,"

exposed the extent of the WorldCom fraud on several key participants, including the then-

chairmen of AT&T and Sprint (Faber, 2003). The so-called "big lie" was promoted through a

spreadsheet developed by Tom Stluka, a capacity planner at WorldCom, that modeled in

Excel format the amount of traffic WorldCom could expect in a best-case scenario of Internet

growth. In essence, "Stluka's model suggested that in the best of all possible worlds Internet

traffic would double every 100 days" (Faber, 2003). In working with the model, Stluka

simply assigned variables with various parameters to "whatever we think is

appropriate"(Faber, 2003).

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This was innocent enough, had it remained an exercise. A problem emerged when the

exercise was extended and integrated into corporate strategy, when it was adopted and

implemented by WorldCom and then by the telecommunications industry. Within a year,

"other companies were touting it" and the model was given credibility it should not have been

accorded (Faber, 2003). As Stluka explains, "there were a lot of people who were saying 10X

growth, doubling every three to four months, doubling every 100 days, 1,000 percent, that

kind of thing" (Faber, 2003). But it wasn't true. "I don't recall traffic ... in fact growing at that

rate … still, WorldCom's lie had become an immutable law." Optimistic scenarios with little

foundation in reality began to spread and pervade the industry. They became emblematic of

the "smoke and mirrors" behavior not only at WorldCom prior to its collapse, but the industry

as a whole. Fictitious numbers drove not just WorldCom, but also other companies as they

reacted to WorldCom's optimistic projections. According to Michael Armstrong, then

chairman and CEO of AT&T, "For some period of time, I can recall that we were back-filling

that expectation with laying cable, something like 2,200 miles of cable an hour" (Faber,

2003). He adds: "Think of all the companies that went out of business that assumed that that

was real."

The fallout from the WorldCom debacle was significant. Verizon obtained the freshly

minted MCI for $7.6 billion, but not the $35 billion of debt MCI had when it declared

bankruptcy (Alexander, 2005). Although WorldCom was one of the largest

telecommunications companies with nearly $160 billion in assets, shareholder suits obtained

$6.1 billion from a variety of sources including investment banks, former board members and

auditors of WorldCom (Belson, 2005). If this sum were evenly distributed among the firms

2.968 billion common shares, the payoff would (have been) well under $1 a share for a stock

that peaked at $49.91 on Jan. 2000" (Alexander, 2005, 3).

There are more losers in the aftermath of the WorldCom wreck. The reemerged MCI

was left with about 55,000 employees, down from 88,000 at its peak. Since March 2001,

however, "about 300,000 telecommunications workers have lost their jobs. The sector's total

employment-1.032 million-is at an eight year low" (Alexander, 2005, 3). The carnage does

not stop there. Telecommunications equipment manufacturers such as Lucent Technologies,

Nortell Networks, and Corning, while benefiting initially from WorldCom's groundless

predictions, suffered in the end with layoffs and depressed share prices. Perhaps most

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significant, in December 2005, the venerable AT&T Corporation ceased to exist as an

independent company.

The Impact on Individuals

The WorldCom fiasco had a permanent effect on the lives of its key players as well.

Cynthia Cooper, who spearheaded the uncovering of the fraud, went on to become one of

Time Magazine's 2002 Persons of the Year. She also received a number of awards, including

the 2003 Accounting Exemplar Award, given to an individual who has made notable

contributions to professionalism and ethics in accounting practice or education. At present,

she travels extensively, speaking to students and professionals about the importance of strong

ethical and moral leadership in business (Nationwide Speakers Bureau, 2004). Even so, as

Dennis Moberg points out, "After Ebbers and Sullivan left the company, "...Cooper was

treated less positively than her virtuous acts warranted. In an interview with her on 11 May

2005, she indicated that, for two years following their departure, her salary was frozen, her

auditing position authority was circumscribed, and her budget was cut""(Moberg, 2006, 416).

As far as the protagonists are concerned, in April 2002, CEO Bernie Ebbers resigned

and two months later, CFO Scott Sullivan was fired. Shortly thereafter, in August 2002,

Sullivan and former Controller David Myers were arrested and charged with securities fraud.

In November 2002, former Compaq chief Michael Capellas was named CEO of WorldCom

and in April 2003, Robert Blakely was named the company's CFO.

In March 2004, Sullivan pleaded guilty to criminal charges (McCafferty, 2004). At

that time, too, Ebbers was formally charged with one count of conspiracy to commit

securities fraud, one count of securities fraud, and seven counts of fraud related to false

filings with the Security and Exchange Commission (United States District Court - Southern

District of New York, 2004). Two months later, in May of 2004, Citigroup settled class

action litigation for $1.64 billion after-tax brought on behalf of purchasers of WorldCom

securities (Citigroup Inc., 2004). In like manner, JPMorgan Chase & Co., agreed to pay $2

billion to settle claims by investors that it should have known WorldCom's books were

fraudulent when it helped sell $5 billion in company bonds (Rovella, 2005).

On March 15, 2005, Ebbers was found guilty of all charges and on July 13th of that

year, sentenced to twenty-five years in prison, which was possibly a life sentence for the 63-

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year-old. He was expected to report to a federal prison on October 12th, but remained free

while his lawyers appealed his conviction (Pappalardo, 2005).

At the time of his conviction, Ebbers' lawyers claimed the judge in the case gave the

jury inappropriate instructions about Ebbers' knowledge of WorldCom's accounting fraud

(Pappalardo, 2005). By January of 2006, Reid Weingarten, Ebber's lawyer, was claiming that

the previous trial was manipulated against Ebbers because three high level WorldCom

executives were barred from testifying on Ebbers' behalf. At that time, too, Judge Jose

Cabranes of the US Second Circuit Court of Appeals commented, "There are many violent

criminals who don't get 25 years in prison. Twenty years does seem an awfully long time"

(MacIntyre, 2006).

Weingarten went on to assert that the government "should have charged the three

former WorldCom employees that could have helped exonerate Ebbers or let them go"

(Reporter, 2006). He charged, too, that "the jury was wrongly instructed that it could convict

Ebbers on the basis of so-called "conscious avoidance" of knowledge of the fraud at

WorldCom" (Reporter, 2006). Perhaps most compellingly, Weingarten called into question

the fairness of Ebbers' sentence that was five times as long as that given to ex-WorldCom

financial chief Scott Sullivan (Reporter, 2006).

Weingarten's claims are not without merit. In August 2005, former CFO Sullivan was

sentenced to five years in prison for his role in engineering the $11 billion accounting fraud.

His relatively light sentence was part of a bargain wherein he agreed to plead guilty to the

charges filed against him and to cooperate with prosecutors as they built a case against

Ebbers. In doing so, Sullivan became the prosecution's main witness against Ebbers and the

only person to testify that he discussed the WorldCom fraud directly with Ebbers (Ferranti,

2005). Others involved in the scandal were also treated less harshly than Ebbers. In

September 2005, judgments were rendered approving settlement and dismissing action

against David Myers and a number of others associated with WorldCom (United States

District Court - Southern District of New York, Judgment Approving Settlement and

Dismissing Action Against Buford Yates and David Myers, 2005, Judgment Approving

Settlement and Dismissing Action Against James C. Allen, Judith Areen, Carl J. Aycock,

Max E. Bobbitt, Clifford L. Alexander, Jr., Francesco Galesi, Stiles A. Kellett, Jr., Gordon S.

Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, and Lawrence

C. Tucker, 2005).

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At the time of this update, Ebbers has been convicted by a court of law, but remains

free on bail while he pursues an appeal. Although the extent of his punishment is under

contention, one thing remains clear - that Ebbers and the other officers at WorldCom are

guilty of presiding over what is to date, the largest corporate fraud in history.

C. Resume Chronological :

The situation

WorldCom is a telecommunications company which was lead by CEO,

Bernard Ebbers, and CFO, Scott Sullivan.

In 1999, WorldCom was not meeting Wall Street‟s revenue and earnings

expectations, and it appeared that the coming year would produce more bad

news.

The CFO argued for setting realistic targets. However, the CEO insisted that

the company needed double digit growth, and pushed for aggressive targets.

These aggressive targets were not supported by historical data or strategic

assessments.

In order to meet these targets, WorldCom began boosting its revenue through

a wide range of accounting measures, including drawing down on reserves

set aside for expenses. The economic situation at the time was not taken into

account when implementing these aggressive accounting measures. Other

similar companies were reporting declining revenues.

It was identified that the management who were making the aggressive

accounting decisions, were also posting the journals to the general ledger,

and reviewing and approving the reporting.

Pressure was placed on personnel who did not support the aggressive targets.

A great deal of focus was put on “team work” and being a strong “team

player”, which is said to have been a strategy to reduce dissenting opinions,

eventually leading the organisation to follow a “groupthink” attitude.

In 2000, the telecommunications industry entered a downturn and

WorldCom‟s aggressive growth strategy suffered a serious set back.

However, due to the accounting measures used, by Q3 in 2000, the company

managed to meet the Wall Street expectations.

Finally, WorldCom‟s stock price started to plummet, and the CEO faced

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margin calls from his bankers, forcing him to either sell his shares or repay

the loans. He did not want to sell his shares as his doing so would put further

downward pressure on the stock price. Therefore, WorldCom directors lent

the CEO US$400 million to meet the loans requirements. Before the release

of Q1 results, 2002, the company‟s revenue was declining, making the task

of showing revenue growth through accounting manoeuvres nearly

impossible.

The disastrous first quarter results were released, and the CEO, Bernard

Ebbers, was asked to resign.

What are the issues?

- Beginning modestly in mid-year 1999 and continuing at an accelerated pace through

May 2002 :

“ The company (under the direction of Ebbers (CEO) and Sullivan (CFO)) used

fraudulent accounting methods to mask its declining earnings by painting a false

picture of financial growth and profitability to prop up the price of WorldCom‟s

stock.”

- The fraud was accomplished primarily in two ways :

“Underreporting „line costs‟ (interconnection expenses with other

telecommunication companies) by capitalising these costs on the balance sheet

rather than properly expensing them. Inflating revenues with bogus accounting

entries from "corporate unallocated revenue accounts.”

The outcome

- Over the course of its operations, WorldCom has successfully acquired a total of 65

companies, of which 11 were acquired between 1991 and 1997, and in that course has

accumulated around $41 billion in debt. By the time it declared bankruptcy in 2002, the

organization had a combined loss of $73.7 billion.

- In 2002, a small team of internal auditors at WorldCom worked together, often at night

and in secret, to investigate and unearth $3.8 billion in fraud. Shortly thereafter, the

company‟s audit committee and board of directors were notified of the fraud and acted

swiftly: Sullivan was fired, Arthur Andersen withdrew its audit opinion for 2001, and the

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U.S. Securities and Exchange Commision (SEC) launched an investigation into these

matters on June 26, 2002.

- By the end of 2003, it was estimated that the company's total assets had been inflated by

around $11 billion.

- On July 21, 2002, WorldCom filed for Chapter 11 Bankruptcy Protection

D. Analysis

Control environment

Unrealistic growth targets (double digits) when expectations were low.

Management‟s philosophy was to be aggressive. Increased pressure on people who did not

support the aggressive targets. The culture and atmosphere encouraged by aggressive targets

led to dishonest, illegal and unethical activities. A great deal of focus was put on “team work”

and being a strong “team player”, which is said to have been a strategy to reduce dissenting

opinions, eventually leading the organisation to follow a “groupthink” attitude. Directors

were allowed to loan $400m to WorldCom to meet loan requirements to cover up financial

difficulties. The control environment allowed this unethical activity to happen.

Risk assessment

Inadequate assessment of internal and external factors, and objectives before setting

aggressive targets. Economic conditions were not considered when implementing aggressive

accounting measures. Other similar companies were declining.

Control activities

Poor segregation of duties:

Reconciliation preparation and reviews

Journals preparation and reviews

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Information and communication

WorldCom CEO, Bernard Ebbers, and CFO, Scott Sullivan knowingly reported information

to their stakeholders, including employees and shareholders, that lacked support and integrity.

They communicated false targets and outcomes to Wall Street to ensure the stock price of

WorldCom continued to escalate and consequently decided to use a wide range of accounting

measures to meet these targets. Access to data entry and manipulation was not appropriately

segregated.

Monitoring

There is limited evidence to suggest appropriate review financial

reporting controls were being reviewed independently.

There was a lack of stringent monitoring of the internal control system

and therefore the quality of the controls around the posting of journal

entries to the general ledger was not identified as a weak control.

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Ethical Perspective

As defined, teleology is a consequentialism-based theory in a business situation

where, “managers must consider which action generates the best overall consequences for all

parties involved. This often entails a cost/benefit analysis aimed at identifying the action that

will maximize benefit for all the stakeholders of the organization”

Indeed, WorldCom’s overstatement classifying payments using other companies’

communications networks as capital expenditures and manipulating its reserve accounts was

questionable. Perhaps when interpreting accounting standards the company’s top executives

utilized the teleological theory where the good over the right became the benchmark of moral

behavior. In other words, the good is the greatest happiness of the greatest number of persons

The decisions and actions instigated by WorldCom’s executives believed they did no

harm and their accounting practices where justified. It helped to increase investor and

stockholder’s interest, making the company profitable over the past several years where all

stakeholders benefited. Since the goal was the greatest good for the greatest number, in this

case the stakeholders, that good may be achieved under conditions that are harmful to some

(other stakeholders), balanced by a greater good (positive profits)

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Conclusion

WorldCom cases drawn from the above conclusion that every ethical behavior and

confidence (trust) may affect the company's operations. weve, ethics in business will not

benefit immediately, because it's the business person must learn to see the long-term

prospects. And Impact on Accounting Profession Activity recording manipulation of the

financial statements that do not in spite of aid management accountant. Accountants who do

provide information that led to the financial statement users do not receive the information

fair. Accountants have violated ethics porfesinya. Manipulation of the recording of the

incident that led to the financial statements of a broad impact on the business activities that

would not be fair to make government intervention to create new rules governing the

accounting profession with a view to prevent any practices that would violate ethics by public

accountants. Behavior and action ketidaketisan especially with regard to financial scandals

affected the confidence of investors and the decreasing activity of the world's stock markets

which caused stock prices. The main Keunci business success is his reputation as a

businessman who uphold the integrity and trust of others. So those who violate the ethics of

the case above for Sanctions penalty in Indonesia is still weak when compared to the

punishment in the U.S.. In America, the perpetrators of criminal sanctions in the financial

sector sentenced to 10 years in prison, while in Indonesia only sanctioned reprimand or

revocation of a license to practice the profession of accounting and business people should

consider the ethical standards for the benefit and sustainability of the business in the long run.

In this case we can draw the conclusion that there is the case of a miraculous case of

irregularities in the accounting professional ethics antanya are:

1. Professional responsibility

As a profesional and also as seoarang public accountant whose work required by the

accountant lain.dalam this case the work is not in accordance with the procedure and is not

responsible for this can be evidenced by the demise of the public accounting firm Arthur

Andersen named.

2. technical standards

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Of the case that it can be concluded that the existence of a public accountant who publishes

financial statements showing not meet technical standards to the detriment of interested

parties such as investors WorldCom itself.

3. objectivity

In this case the fraud occurred miraculous piihak-party presence felt in the lucrative and also

the injured party by the CPA itself.

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References

.Ferranti, Marc. Ex-WorldCom CFO Sullivan Gets Five Years in Jail. Computerworld Inc.,

12 August 2005.

Nationwide Speakers Bureau, Inc. Cynthia Cooper: WorldCom Whistle Blower. 2004.

Pappalardo, Denise. Ebbers Jail Time Put Off, For Now. Network World, Inc., 8 September

2005.

Reporter. Appeals Court Hears Ebbers Case: Judge Questions Ex-WorldCom Chief's 25-year

Sentence. Reuters, 30 January 2006.

Rovella, David E. JPMorgan to Pay $2 Bln to Settle WorldCom Fraud Suit. Bloomberg L.P.,

16 March 2005.

http://money.howstuffworks.com/cooking-books9.htm

http://www.worldcomfraudinfocenter.com/

http://yvesrey.wordpress.com/2011/02/10/kasus-skandal-akuntansi-pada-worldcom/

http://kartikatriperwirasari.wordpress.com/2010/06/01/world-com/

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