The Auditing in Practice feature "Fraud in the Acquisition and Payment Cycle at WorldCom and Phar-Mor" introduced you to the basic facts underlying the WorldCom fraud.
Use appropriate sources to answer the following questions:
a. Identify the names of the following individuals at the company, describe their role in the fraud, and describe the penalties that they ultimately faced (if any): the CEO, CFO, controller, and the director of internal audit.
b. What appears to have been the incentives and opportunities to commit the fraud?
c. Comment on the likely ethical dilemma that Cynthia Cooper faced when she initially uncovered the fraud.
d. Which audit firm conducted the external audit on WorldCom's financial statements in the years prior to the discovery of the fraud? Why might the auditors have lacked the necessary professional skepticism to uncover the fraud?