Research the Worldcom accounting scandal using the internet or other sources. Please provide as much relevant, detailed and important information as possible in your answers.

1. Provide an executive summary of the case, detailing the background, issues and main causes, key persons for the case. Any source of external information is to be referenced.

2. Worldcom misled investors, lenders, and other stakeholders by not following proper Generally Accepted Accounting Principles. Describe the two primary ways the company increased net income by violating GAAP.

3. In addition, Worldcom violated some of the accounting principles, assumptions and qualitative characteristics we discussed in class. Describe two of the other accounting principles, assumptions or qualitative characteristics that were violated.

4. Before the accounting violations were discovered, they resulted in higher net income for the company. How did this higher net income benefit the following stakeholders:

The company

The bonuses of top executives

5. After the accounting improprieties were discovered, they resulted in serious consequences for several groups of stakeholders. Describe the penalties, punishment and/or other negative repercussions to the following stakeholders:

The company

Employees of the company

The companys key executives: CEO Bernard Ebbers and CFO Scott Sullivan

Shareholders who owned Worldcoms stock at the time the scandal was reported