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Understanding WorldCom's Accounting Fraud: Did Groupthink Play a Role?

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Executive Summary

WorldCom, Inc. perpetrated the largest accounting fraud in U.S. history. WorldCom, now called MCI, emerged from bankruptcy protection on April 20, 2004 after being fined $750 million. In total, WorldCom reported accounting irregularities of $11 billion. While employees and investors look for individual culpability, much of WorldCom's organizational structure and culture potentially contributed not only to the fraud but also to the length of time over which it occurred. In many ways, groupthink may help explain some of the issues and fraudulent activities at WorldCom as well as the pressures that were placed on employees extending the period over which the fraud occurred.

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