Events that shook global businesses

World com -Information Technology Sector – USA

WorldCom started as Long Distance Discount Services company in 1983 . Begining till 2001 went

through aggressively with a series of acquisitions and mergers. Twenty years down the lane by

2002 it was forced to cut its global workforce and was facing investigations from government and

regulatory authorities .It was the second largest long distance phone company in the US. In 1997.

WorldCom announced merger with MCI which turned out to be largest merger in the history of US .

Fortunes turned and Moody’s and S&P lowered the credit rating to junk status .

The malpracticessb included huge sums that were loaned to Bernard Ebbers the CEO which were

questionable and placed under scrutiny

Life in an Internal audit department could be very boring at times .An employee of WorldCom

Inc. When one stumbles upon an accounting entry for $500 million for computer expense the boring

life becomes nightmare and one would be shocked beyond belief when there were no supporting

documents. All that one needed was accounting common sense to figure out that something was

not right..

Unfortunately for Worldcom there were few employees in that internal audit department with

integrity and plenty of common sense and the frauds could not remain hidden ..

The auditor who found the expense entry immediately took his concern to his boss, the company's

vice president of internal audit who already had some information about possible misdeeds and

about the cooking-up of books. The Audit team soon figured out that the fraud was much bigger

and gigantic and in months’ time they had unearthed $3.8 billion in cooked up expenses and phony

and fraudulent accounting entries. It all amounted to an accounting fraud that turned out to be the

largest in US corporate history.

...read on

Managing change and people in organizations