WorldCom: The Accounting Scheme Backfires

Was a fraudulent accounting scheme - or the bursting of the telecom bubble - ultimately responsible for one of the world's largest bankruptcies?
Sudhakar Balachandran, Gil Sadka  | Spring 2008
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In the early 2000s, the telecom industry, which had experienced wild growth since the mid-1980s breakup of AT&T, began to unwind. In response, the management team at WorldCom embarked on a fraudulent scheme to maintain its favored status with investors. Are there other instances in which short-term "good numbers" create long-term problems for financial managers? This case teaches students about the implications of WorldCom's crimes and poses larger questions about truth in accounting.

Case ID: 080108
Supplemental Materials: Teaching Slides

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