Run that by me again? Worldcom may go belly up because of the scandal:
WorldCom Inc. teetered toward what would be the largest bankruptcy in U.S. history after shocking Wall Street — and the president — with yet another corporate scandal: $3.8 billion in expenses hidden from investors.
Stocks plunged Wednesday after the disclosure by the long-distance and Internet ( news - external web site) services company, the latest revelation of how business ethics were trashed during the technology boom of the late 1990s.
I thought businesses went bad during the evil 80's under Reagan's watch. You mean to tell me that it really happened during the greatest peacetime expansion of our economy in history, under the watchful eye of Bill Clinton? Say it ain't so!
Arthur Andersen served as WorldCom's accountant during the period in question. The accounting firm, once one of the world's largest, was convicted earlier this month for the destruction of documents related to its work for Enron.Andersen blamed WorldCom for the inaccuracies and said its work was in compliance with SEC standards: "It is of great concern that important information about line costs was withheld from Andersen auditors by the chief financial officer of WorldCom."
But accounting experts disagreed. Bob Bertucelli, director of the tax institute at Long Island University in New York, said there's no way that such an accounting error should have gotten past Andersen's audit.
"The auditor is responsible for everything that goes on, whether it's discussed with the auditing firm or not," Bertucelli said. "It should have been found. It's a clear cut violation of generally accepted accounting principles."
Arthur Anderson again. Why am I not surprised?
UPDATE Rand Simberg is asking the same question I am
Posted by Rich at June 26, 2002 11:58 PM