1. Give the gist of the fraudulent accounting act that transpired at WorldCom between the late 1990's and early 2000's.2. In what situation is a company better off capitalizing expenses than straight out expensing them? How about the reverse?3. How did the stakeholders and the rest of society (outside of WorldCom) lose from this fraudulent act?

The fraudulent accounting act at WorldCom involved the misclassification of operating expenses as capital expenses. This was done to inflate the company's assets and profitability. From the late 1990s to the early 2000s, WorldCom's management manipulated its financial statements to hide the fact that the company was not as profitable as it appeared. This was done by capitalizing costs that should have been expensed and creating reserves from the inflated profits to cover future expenses. This fraudulent act was eventually discovered, leading to the company's bankruptcy in 2002.

A company is better off capitalizing expenses when the benefits of the expenditure extend beyond the current accounting period. By capitalizing the expense, the cost is spread over the useful life of the asset, which can improve the company's net income in the short term. On the other hand, a company might prefer to expense a cost immediately if it does not expect to receive future economic benefits from the expenditure, or if the cost does not improve the asset's condition beyond its originally expected performance level.

The stakeholders of WorldCom, including its employees, shareholders, and creditors, suffered significant losses as a result of the fraudulent act. Many employees lost their jobs, while shareholders saw the value of their investments plummet. Creditors also lost money as the company went bankrupt and was unable to repay its debts. The rest of society also suffered from the loss of trust in the corporate world and the financial markets. This led to stricter regulations and oversight to prevent similar fraudulent acts in the future.