WorldCom Committed Financial Statement Fraud By

question 11

Multiple Choice

WorldCom committed financial statement fraud by:

• A) expensing items that should have been capitalized.
• B) understating net income.
• C) using IFRS to make the company look better.
• D) capitalizing items that should have been expensed.

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Definitions:

Justifies Act

A rationale or reason given for taking a specific action, often framed in moral, logical, or practical terms.

Compromise Mechanism

A psychological strategy where conflicting demands are met by finding a middle ground or mutual concession, thus reducing internal tension.

Rationalization

A defense mechanism where controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Bogus Reasons

False, misleading, or unfounded reasons provided to justify a decision or action.