Bernard Ebbers In The Accounting Fraud

851 Words4 Pages
This paper evaluates the role played by Bernard Ebbers in the accounting fraud committed by WorldCom and in its demise resulting in the largest bankruptcy, at that time, in US history. A brief history of the expansion of the company will be followed by an explanation of the business strategy and methods used to grow the company to provide the context for the evaluation of Ebbers leadership style and his contribution to the fraud According to Kidwell & Martin (2005), Bernard Ebbers started out with a Motel chain, and after investing in a telecommunications company, LDDS, a retailer of long -distance telecommunication service, he gained control and became CEO of LDDS. The dominant strategies to make the company profitable were cost cutting…show more content…
Trevino & Brown (2005) explain social exchange as being influence asserted by Charismatic leaders through a relationship developed over time, in which reciprocity and fairness are expected, but where no formal transaction, enforceable by others, exists. Trevino & Brown (2005) explain social learning as learning by example, and learning “vicariously” by imagined participation in the punishment and reward of others. Trevino & Brown(2005) also suggest that the senior executives are responsible for the culture in an organization , and even by default, if they do not openly support something, because executives are assessed from a distance and by their reputation (Klebe Trevino, Brown, & Pincus Hartman, 2003) . Ebbers, could thus be said to have influenced the employees to be unethical through the method of social learning and exchange because he demonstrated unethical behaviour to the employees by not putting key financial transactions into writing when he gave loans to executives to buy stock without paperwork (Kidwell & Martin, 2005). Ebbers, could also be accused of creating a culture which protected the stock price at all costs because he became nasty when the company missed earnings by 1 cent (Kidwell & Martin, 2005) and which could have influenced people such as the Chief Financial Officer, Sullivan, to be unethical at a later
Show More
Related

  • Cynthia Cooper Worldcom Failure

    881 Words  | 4 Pages

    Cynthia Cooper’s Discovery of WorldCom’s Fraud After earning her Master of Science in Accountancy at the University of Alabama, Cynthia Cooper started her career as a Certified Public Accountant. Later on in her career, she was named “People of the Year” by Time magazine for helping discover one of the largest accounting scandals in corporate history. Cynthia Cooper and her team of internal auditors detected the fraudulent activity that was conducted by the top managers of WorldCom and helped save

    Read More

  • The Pros And Cons Of Fraud

    986 Words  | 4 Pages

    FRAUD Fraud encompasses a wide range of irregularities and illegal acts characterized by intentional deception or misrepresentation. The Institute of Internal Auditors’ (IIA’s) IPPF defines fraud as any illegal act characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal

    Read More

More about Bernard Ebbers In The Accounting Fraud

Open Document