Question: 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

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?

Step by Step Solution

★★★★★

3.37 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a CEO Bernard Ebbers He likely knew of the fraud and put massive pressure on the CFO and Controller to make the numbers that the analysts expected He took huge loans from the company and had large deb... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

330-B-A-A-B-R (1306).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

The Auditing in Practice feature "Examples of Fraud in the Physical Observation of Inventory" provides examples of how clients may fraudulently manipulate inventory amounts. List at least five such...

Refer to the Auditing in Practice feature Fraud in the Acquisition and Payment Cycle at WorldCom and Phar-Mor. Compare and contrast the nature of these two frauds, motivations underlying the frauds,...

The Auditing in Practice feature, "Application of Accounting Principles and Related Disclosures," discusses guidance from AS 12 regarding the auditor's responsibilities to understand management's...

The Focus on Fraud 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...

The scribes of ancient Egypt were the forerunners of today's accountants. a. True b. False Possible Exam 1 Questions Chapter 1: 3. The scribes of ancient Egypt were the forerunners of today's...

ATC 14-1 (Pg. 686) 1.(Follow the cash) In a narrative format, answer the questions posed in the case. 2.What is meant by "presentation of financial statement information in common-size amounts rather...

Use the materials provided for PalomarHealth to answer the following questions: a. Has Palomar Health succeeded with itsfinancialgoals? Use ratios, the budget, and thefinancialreportin answering this...

I'm an undergrad accounting student in an introduction to forensic accounting course.I need help getting started on a final project for this class over a fictitious company called the Grand Teton...

Please read the attachment chapters and answer the following questions with at least 50 words. Depreciation discussion What are the various methods of determining depreciation and amortization...

Within a cubic unit cell, sketch the following directions: (a) , [1 10] (b) , [1 2 1] (c) , [01 2] (d) , [13 3] (e) , [1 1 1] (f) , [1 22] (g) , [12 3 ] (h) . [1 03]

You have a gas confined to a cylinder with a movable piston. What would happen to the gas pressure inside the cylinder if you do the following? (a) Decrease the volume to one-fourth the original...

1.3 Assignment: Mathematical model This is an assessment opportunity which is used to evaluate your work based on established criteria. Instructions There are 4 Tasks in this assessment opportunity...

You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on January 1, 2011, with an initial contribution by the...

The Boise Manufacturing Company uses a job order costing system. For Job #221, the production manager requisitioned $1,500 of direct materials and used 35 hours of direct labor at $30 per hour....

Refer to the CPA firm in problem 13.20. In planning for next year, Cohen estimates that billable hours will increase by 10% in each of the 6 months. He therefore proceeds to hire a fifth CPA. The...

David Mashley teaches two undergraduate statistics courses at Kansas College. The class for Statistics 201 consists of 7 sophomores and 3 juniors. The more advanced course, Statistics 301, has 2...

Various costs associated with manufacturing operations are given below: 1. Plastic washers used to assemble autos. 2. Production superintendents salary. 3. Wages of workers who assemble a product. 4....

Considering the brief information presented for each of the case examples, in your view, was the appropriate sentencing option selected?

Assume you are an investor in BFA. As an investor, what type of information would you be interested in reviewing before making an investment in BFA? Do you believe that BFA should have been exempt...

Consult Paragraph 7 of PCOAB Auditing Standard No. 9.Consider the planning phase for the audit of BFAs trust department operations. As an auditor, what type of evidence would you want to collect and...

Consult Paragraphs 7-10 of PCAOB Auditing Standard No. 12. Based on your understanding of risk assessment and the case information, identify three specific factors about WorldComs strategy that might...

The Harding Company manufactures skates. The companys income statement for 2013 is as follows: HARDING COMPANY Income Statement For the Year Ended December 31, 2013 Sales (11,100 skates @ $72 each) $...

Need both AW's and which is recommended!!! A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 39%, and MACRS depreciation is used. If the desired...

Anderson Company's last dividend was $2. The dividend growth rate is expected to be 10% for the next two years (Year 1 to Year 2), after which dividends are expected to grow at a constant rate of 5%...