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was not wholly attributable to World Com's behavior, AT&T Corp.'s decimation certainly was facilitated by the events surrounding World Com, since World Com was the benchmark long distance telephone and Internet communications service provider.
An internal audit turned up the billions World Com had announced as capital expenditures as well as the $500 million in undocumented computer expenses.
There was also another $2 billion in questionable entries.
World Com's audit committee was asked for documents supporting capital expenditures, but it could not produce them.
The controller admitted to the internal auditors that they weren't following accounting standards.
In December 2005, two years after this case was written, the telecommunications industry consolidated further.
Verizon Communications acquired MCI/World Com and SBC Communications acquired AT&T Corporation, which had been in business since the 19th Century.The acquisition of MCI/World Com was the direct result of the behavior of World Com's senior managers as documented above.While it can be argued that the demise of AT&T Corp.In an effort to increase revenue, World Com reduced the amount of money it held in reserve (to cover liabilities for the companies it had acquired) by .8 billion and moved this money into the revenue line of its financial statements.That wasn't enough to boost the earnings that Ebbers wanted.When it emerged from bankruptcy in 2004, World Com was renamed MCI.Former CEO Bernie Ebbers and former CFO Scott Sullivan were charged with fraud and violating securities laws.Ebbers was found guilty on all counts in March 2005 and sentenced to 25 years in prison, but is free on appeal.Sullivan pleaded guilty and took the stand against Ebbers in exchange for a more lenient sentence of five years.The low margins that the industry was accustomed to weren't enough for Bernie Ebbers, CEO of World Com.From 1995 until 2000, World Com purchased over sixty other telecom firms. World Com moved into Internet and data communications, handling 50 percent of all United States Internet traffic and 50 percent of all e-mails worldwide.