Was a fraudulent accounting scheme - or the bursting of the telecom bubble - ultimately responsible for one of the world's largest bankruptcies?
Was a fraudulent accounting scheme - or the bursting of the telecom bubble - ultimately responsible for one of the world's largest bankruptcies?
In the early 2000s, the telecom industry, which had experienced wild growth since the mid-1980s breakup of AT&T, began to unwind. In response, the management team at WorldCom embarked on a fraudulent scheme to maintain its favored status with investors. Are there other instances in which short-term "good numbers" create long-term problems for financial managers? This case teaches students about the implications of WorldCom's crimes and poses larger questions about truth in accounting.