Accounting Fraud at Worldcom 2 Essay

1418 Words Aug 15th, 2011 6 Pages
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Essay Sample
Accounting Fraud at WorldCom Vanessa Gail Woods Strayer University Connor-Green/ACC 576 March 21, 2010 Accounting Fraud at WorldCom The break up of AT&T opened the long distance service market to small companies during the mid- to late-1980s and 1990s. Long Distance Discount Service (LDDS) opened in 1983 with moderate growth until its stock went public in 1989. CEO Bernie Ebbers decided to grow the organization through acquisitions (70 companies over the course of its

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Pros and cons of “whistle blowing”

The investigation of WorldCom found that the second largest fraud in history at that time continued as long as it did because no one in the financial or accounting department had the courage to blow the whistle. There are pros and cons of “whistle blowing” that should be taken into consideration when one is making the determination to expose fraud at any level.

For a person to be a whistle blower they must have integrity and a desire to minimize the wrongs in a culture where management cuts corners to improve the bottom line. All facts must be known and consideration of the consequences must be taken into account. The informant must take the proper steps in notifying those within the organization or their immediate supervisor first to lay a trail that can shed light on the extent of the corporate governance breakdown. One must recognize that there is no safety zone in making this choice, but a clear conscience can be a great motivator to step outside the realms of the corporation and enlist the help of the external auditors or the SEC. The pros of being the whistleblower is that those who have invested in the organization, both internal and external stakeholders, will have their investments protected and faith in the market is retained.

The flip side to being a whistle blower is the hassles and retaliation from those whose
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