Adelphia Scandal and Worldcom Scandal Essay

Basic Questions 1. Rigas Entities were entities that shared a common money management system with Adelphia and Adelphia subsidiaries, which Adelphia controlled and operated. Since the scandal broke, it is commonly referred as off-the-book entities. 2. EBITDA (Earnings Before Interest, Taxes, depreciation and Amortization) is essentially net income with interest, taxes, depreciation, and amortization added back to it, and can be utilise to analyze and compare profitability between companies and industries because it eliminates the effects of financing and report decisions.-from Investopedia 3. Self-dealing basically refers to when directors of a participation improperly uses company finances or resource for in the flesh(predicate) gain. This can include directors taking company loans that the directors do not intend to repay, using company money for extraordinary personal use, or using company property for personal gain.See much Is the Importance of being earnest a satirical pl ay establishAdvanced Questions 1. Both Adelphia scandal and WorldCom scandal were not prevented by companys external auditor, though Deloitte and Touche and Arthur Andersen both rated their client as advanced risk. As for the differences, Adelphia did not have an independent inseparable auditor. However, WorldCom had an independent internal auditor and blows the whistle. 2. I will say Deloitte and Touche is most responsible for not detecting and stopping. As an external auditor, they should pay attention to organizations financial records and examine on any mistakes or fraud. At least, Deloitte and Touche should have stopped Timothy Rigas from serving as CFO and Director of Adelphias Accounting Committee. After all, it was obviously against the rules. 3. Timothy Rigas received a levelheaded prison sentence as we can see from the WorldCom case Bernard Ebbers was sentenced to 25 years. As for John Rigas, a former CEO who was guilty of more(prenominal) than 15 counts of fraud. Rat ionally speaking, it seems to be a fair judgment. However, it sounds too scratchy to keep an old man who has been suffered from cancer in jail.