
Product details

Subject category:
Ethics and Social Responsibility
Published by:
Harvard Business Publishing
(2004)
Version:
14 September 2007
Length:
18 pages
Data source:
Published sources
Abstract
The principal players in WorldCom's accounting fraud included CFO Scott Sullivan, the General Accounting and Internal Audit departments, external auditor Arthur Andersen, and the board of directors. The case provides sufficient detail to allow for a full discussion of the pressures that lead executives and managers to 'cook the books', the boundary between earnings smoothing or management and fraudulent reporting, the role for internal control systems and internal audit to prevent or rapidly detect accounting fraud, the expectations about governance processes performed by external auditors and the board of directors, and the pressure and consequences when middle managers follow orders that they know are wrong. Written from the public record, the case contains numerous quotes from an individual involved in the WorldCom fraud that were reported by the Investigative Committee and Wall Street Journal articles about several of the individuals caught up in the situation.
Topics
Business ethics; Financial statements; Organizational behavior; Accounting policies; Accounting procedures; Organizational culture; Corporate governance; Fraud; Auditing; Bankruptcy; Leadership; Board of directors; Financial accountingSetting
The events covered by this item took place in 1999-2002.Geographical setting
Region:
Americas
Country:
United States
Featured company
Company name:
WorldCom
Employees:
10000+
Turnover:
USD 30 billion
Industry:
Telecommunications
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