Accounting Fraud at WorldCom Case Solution

Case Solution

The primary players in World Com's accounting fraud incorporated CFO Scott Sullivan, the general Accounting and Internal Audit departments, exterior auditor Arthur Andersen, as well as the board of company company directors. The case provides sufficient detail allowing an entire discussion in the demands adding professionals and managers to organize the books, the boundary between earnings getting rid of or management and fraudulent verifying, the part for internal control systems and internal audit to prevent or rapidly identify accounting fraud, the anticipation about governance processes completed by exterior auditors as well as the board of company company directors, as well as the pressure and effects when middle managers follow orders they are fully aware are wrong. Designed in the criminal history, the case includes numerous quotes from the person mixed up in World Com fraud that have been reported with the Investigative Committee and Wall Street Journal articles about some people taken up inside the situation.

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Questions Covered

1. Why were the actions taken by WorldCom managers not detected earlier?

2. What processes or systems should be in place to prevent or detect quickly the types of actions that occurred in WorldCom?

3. Were the external auditors and board of directors blameworthy in this case? Why or why not?