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ACCT 461 Week 4 Case Study Latest

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ACCT 461 Week 4 Case Study Latest

ACCT 461 Week 4 Case Study Latest

ACCT461

ACCT 461 Week 4 Case Study Latest

Case 7-5 (“Accounting Fraud at WorldCom”)

Please locate the content for this Case Study at the end of Chapter 7 in our course textbook.

Case 7–5: Accounting Fraud at WorldCom

1. Explain the nature of the accounting fraud.

2. What are the pressures that lead executives and managers to “cook the books?”

3. What is the boundary between earnings smoothing or earnings management and fraudulent reporting?

4. 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?

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

6. Betty Vinson: victim or villain? Should criminal fraud charges have been brought to her? How should employees react when ordered by their employer to do something they do not believe in or feel uncomfortable doing?