WorldCom Quiz

Which company's scandal is our presentation?

• Luckin Coffee

• Enron

• Worldcom

• Vietjet Air

What year did Worldcom declare bankruptcy?

• 2001

• 2002

• 2003

• 2004

What did WorldCom do to adjust accruals?

• WorldCom capitalized the excess capacity expenses that were not generating revenue. 

• No proper business or accounting rationale for these procedures.

• WorldCom has wrongly classified its expenses as an asset account

• All answers above

One of the causes of WorldCom’s accounting scandal is that The Board started to look out for pleasing management rather than fulfill its duty to protect the stake holders.

• TRUE

• FALSE

From the WorldCom’s accounting scandal, the State Securities Commission must have the task of managing the listing of securities of companies.

• FALSE

• TRUE

What is the lesson to be learned from this case for businesses?

• A. Take into account the interests of employees, customers and business partners

• B. Should gather as much information as possible about the previous fraud 

• C. Use several performance indicators to evaluate and analyze the financial health of the company.

• Both A & C

How many employees were fired after the scandal?

• 11,000

• 15,000

• 17,000

• 20,000

How did WorldCom’s accounting scandal affect the Internal Environment?

• The investors of WorldCom lost money

• WorldCom’s competitors were also hurt by the fraud

• 10,000 employees at WorldCom were let go

• Top management was removed

What is the cause of WorldCom’s accounting scandal?

• Lack of a competitive strategy

• Weak internal controls

• The failure to look out for what was best

• All answers above