WorldCom financial fraud
Financial fraud is a major white collar crime that usually needs to be dealt with seriously
Penalties and fines. The WorldCom debacle was one of the most shocking and well-known
Fraud in the United States over the past decade. At WorldCom, one of the world’s largest companies
Telecom companies attempted to fraudulently inflate profits by $4 billion in 2001
The retiree has stock in the company in his portfolio. Company Annual Accounts
Both reporting and balance sheets are affected by the decision.
WorldCom appears to lack audit assurance. Internal auditors cannot do this
Properly report to the Audit Committee on WorldCom’s operations and financial condition
Because of lack of resources. Nor is it possible for the committee to meet regularly.
Therefore, no action was taken to resolve the issue. Still, Andersen is responsible
provide investors with an unbiased assessment of WorldCom’s financial condition; and
creditor. Furthermore, to the best of its knowledge and belief, the audit firm failed to meet its obligations
ability. Andersen’s inability to detect fraud is largely due to lack of fraud
Management’s emphasis on and strict control over information.
Andersen’s approach is flawed because it relies on WorldCom’s so-called validity
Internal control environment that limits the verification of account balances. scam can
could be determined more quickly if the external auditors were more thorough
detection. Andersen was reluctant to bring the matter to the attention of the Audit Committee,
Although dissemination of information by top management has been questioned
(Beresford et al., 2003).
Finally, the lesson to be learned from this case is that when a company appears
In a hostile external environment, internal auditors have a duty to investigate
matter. In addition, independent external auditors should approach the company’s audit
Approach with an unbiased, unbiased point of view.
WorldCom (Company). Board of Directors. Special Investigative Committee, Beresford, D.R., Katzenbach,
N.D. & Rogers, C.B. (2003). investigative report. discovery method.