WorldCom Scandal

The WorldCom scandal was a major corporate accounting fraud where the telecommunications company exaggerated its earnings by billions of dollars. Executives manipulated financial reports by improperly shifting costs and inflating revenue figures to appear more profitable than it truly was. This deception misled investors, regulators, and the public, ultimately leading to one of the largest corporate bankruptcies in U.S. history in 2002. The scandal highlighted significant flaws in corporate governance and accounting oversight, resulting in increased regulations like the Sarbanes-Oxley Act to improve financial transparency and accountability.