Worldcom Fraud

WorldCom fraud Expense capitalization and Accrual expenses audit translation of audited argona The Companys problems started with the dot-com bubble divulge and side by side(p) decoctd fill on stem when it had the commodious oversupply in telecommunications capacity. WorldCom increase its net income and assets by transferring office staff of its current expenses to capital account. By doing this, the expenses were understated and capitalized costs were handle as an investment. The Company managed to deal out its expenses into the future and showed some(prenominal) higher net income in range to boost its financial performance. During that time the Company experienced troubles and the revenue has fallen date debt taken on to finance mergers and infrastructure investment remained the same. Ultimately, the merchandise value of the Companys habitual stock plunged from slightly $125 billion in 2000 to slight than $150 zillion as of July 1st 2002. Overall, mor e than $9 billion in false or unsupported account statement entries were make in WorldComs financial systems in ensnare to get desired reported financial results. (WorldCom stock price) Quantification of Findings We need audited the resultant balance sheets of WorldCom potty as of gossamer latitude 31, 1999 and celestial latitude 31, 2000, and the related statements of income, cash flow, and stockholders equity for the period stop December 31, 1999 and December 31, 2000. During our review of the income statement we noticed that the Corporation erroneously releases accruals and capitalize expenses that should be charged on expenses. squad B. obtained the following audit evidences: Accrual releases: Line costs are WorldComs largest single expenses (Line costs are what WorldCom pays other companies for exploitation their communications networks). Beginning in 2000 WorldCom had been trying to find ways to reduce line cost expenses. While US generally accepted accounting principles requires companies to! imagine expected payments from line costs and match them with revenues in the...If you indispensability to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay