Worldcom fiasco

Running Head : WORLDCOM FIASCO

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WorldCom Fiasco

WorldCom was a company that was dealing with long distance telephone and internet communication server provider technologies . The company at one time became bankrupt because of the mangers who were appointed made the company to go into liquidation because they undertook fraudulent deals and this lead to the collapse of the company . The new chief Executive Officer Mr . Michael Capellas and Mr . Robert Blakely were appointed so as to conduct an audit about the performance of

the company . The task of auditing was difficult because the company had so many employees and so many assets of the company had been overvalued and this amounted to increased fraudulent cases that needed to be reviewed Recent studies showed that the company 's fraud was as a result of the company 's management 's employee 's mismanagement of the companies operations . HYPERLINK "http /www .seu .edu /ethics /dialogue /cande /cases /worldcom-update .html http /www .seu .edu /ethics /dialogue /cande /cases /worldcom-update .html

WorldCom Company 's disasters of bankruptcy lead to the laying off workers . The investors and the mangers pension funds were not given to them since the company did not have enough money to pay all the workers The status of the lives of retirees was also affected because they did not have enough money to cater for them once they terminated their employment . It was observed that besides the poor management of the WorldCom Company the telecommunication industry was overbuilt and it could not absorb the capacity of technology that had been built into the system for many years . The WorldCom shares which had peaked at 62 three years ago had fallen to 83 cents at the trading of the stock exchange this lead to the halting of the company operations The management of the company had also borrowed 30 billion from different companies and at the time of its collapse it had a huge debt such that it was not able to recover to pay its debts of its customers (Maasen , G .F 1999

The collapse of the World Com Company had also a positive effect because the managers of most corporations became more responsible since they wanted to maximize profits in their businesses . The government of Congress imposed instructions that all corporations were supposed to follow the rules and regulations of the company and thus the company 's management could no longer manipulate the balance sheets of the WorldCom Company . Another change that was to be undertaken was that the higher management levels salaries were reduced so that the company would cut on its expenses on the salaries and wages which were taking up the company 's largest budget . The ranks of the high-level management structures were regulated so that the right people would hold these positions so as to enable the proper management of WorldCom Company and this reduce the incidence of fraud . HYPERLINK "http /www .be .wvu .edu /bl-online /news /badnews .htm http /www .be .wvu...