Worldcom Case Study

902 Words4 Pages
1. What factors in the WorldCom case support the conclusion that CEO Bernie Ebbers Knew about the financial statement fraud? What factors support his defense that he did not know about the fraud? Bernie Ebbers Knew about the financial statement fraud because he was the one who encourage others to go into financial fraud because of the stock prices were going down, which was affecting his marginal loan. For that reason, he was trying to sell his stock, but the board of Directors lent him $341 million, along with 2% interest rate. On the other hand, as he never sold his WorldCom stock, which was a showed that he was unaware of the fraud of financial statements and accurate position of WorldCom. 2. If the fraud had not been detected when it was, how long do you think it might have continued and how would it have ultimately been revealed? If the fraud has not been detected that it might have been gone 10- 20 years undetected. It may have been ultimately detected by the use of checks and balances, and multiple audits through independent auditors. In addition, The US Justice Department should not let WorldCom to go into merger and acquisition as it was creating monopoly. For that reason, they were able to play high. 3. How could the fraud at WorldCom been prevented? If there would be more checks and balances and segregation of duties, then the fraud has been prevented. In addition, if WorldCom have independent auditor then it would have also prevent fraud. 4. Which one person
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