Worldcom Fraud Case
Study
Using the case below
please help with these questions:
Accounting Fraud at
WorldCom
By Robert . Kaplan and
David Kiron
http://www.hbs.edu/faculty/Pages/item.aspx?num=31127
1. What are the
pressures that lead executives and managers to “cook the books?”
2. What is the
boundary between earnings smoothing or earnings management and fraudulent
reporting?
3. Why were the
actions taken by WorldCom managers not detected earlier? What processes or
systems should be in place to prevent or detect quickly the types of actions
that occurred in WorldCom?
4. Were the external
auditors and board of directors blameworthy in this case? Why or why not?
5. Betty Vinson:
victim or villain? Should criminal fraud charges have been brought against her?
How should employees react when ordered by their employer to do something they
do not believe in or feel uncomfortable doing?
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