1、Congressional Research Service The Library of CongressCRS Report for CongressReceived through the CRS WebOrder Code RS21253Updated August 29, 2002WorldCom: The Accounting ScandalBob LykeSpecialist in Social LegislationDomestic Social Policy DivisionMark JicklingSpecialist in Public FinanceGovernment
2、 and Finance DivisionSummaryOn June 25, 2002, WorldCom, the Nations second largest long distancetelecommunications company, announced that it had overstated earnings in 2001 and thefirst quarter of 2002 by more than $3.8 billion. The announcement stunned financialanalysts and, coming on top of accou
3、nting problems at other corporations, had anoticeable effect on the financial markets. The accounting maneuver responsible for theoverstatement classifying payments for using other companies communicationsnetworks as capital expenditures was characterized by the press as scandalous, andit was immedi
4、ately asked why Arthur Andersen, the companys outside auditor at thetime, had not detected it. WorldCom filed for bankruptcy protection on July 21st. OnAugust 8th, the company announced that it had also manipulated its reserve accounts inrecent years, affecting an additional $3.8 billion.Response in
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