The WorldCom ScandalContentKey Elements of WorldCom………………………………………………………………………3Corporate Governance Issues at WorldCom… …………………………………………......4Corporate governance in the United Kingdom................. ......... ......................................... ......................... ...........…...5, 6Conclusion………………… ………………………………………………………………… …… 6References………………………………………………………… ……………………….7Key Elements of WorldComWorldCom started as a small provider of long distance telephone service. During the 1990s, the company made a series of acquisitions of other telecommunications companies that increased its reported revenues from $154 million in 1990 to $39.2 billion in 2001 (Lyke and Jickling , 2002). The economic problem was that WorldCom had a vast telecommunications offering. capability that emerged in the 1990s, as the industry rushed to build fiber optic networks and other infrastructure based on overly optimistic projections of Internet growth (Lyke and Jickling, 2002). In 2001, the telecommunications market weakened; meaning prices were falling due to excess supply and decreased demand at the end of the Internet boom. WorldCom had already signed contracts with third-party telecommunications companies promising to finalize their calls. These multibillion-dollar contracts actually cost more in expenses than the company received or received in revenue (Sandberg, Solomon, & Blumenstein, 2002). In 2002, WorldCom's bankruptcy was the largest in U.S. history; WorldCom admitted to falsely accounting for $3.85 billion in expenses to make the company appear more profitable. Ebber, who was CEO of WorldCom, created fictitious accounting practices that were more than questionable. Thus began the practice of taking an operating expense and reclassifying it into...... middle of paper......practice. The changes were made to prevent problems that arose in the WorldCom scandal through greater transparency of financial information, internal control and shareholder protection. References Lyke, B and Jickling, M. (2002). WorldCom: the accounting scandal. CRS Report for Congress, p2. Sandberg, J., Solomon, D., & Blumenstein, R. (June 27, 2002). A spot accounting audit uncovered a scandal on WorldCom's books. Retrieved from The Wall Street Journal: http://online.wsj.com/article/SB102512901721030520.htmlSolomon, J (2013). Corporate governance and accountability. 4th ed. Sussex: John Wiley & Sons Ltd. p.7, p9, p10, p15, p58, p60, p253. Nottingham Trent University. (2013). Lecture 1 – An introduction to corporate governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last consulted on December 16 2013.