Worldcom the Story of a Whistleblower

interoffice memorandum

to: Advanced auditing (accounting 5323) students

subject: worldcom the story of a whistleblower case

date: [ 1/24/2012 ]

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This memo discusses several aspects of the Sarbanes Oxley Act of 2002 as it relates to the WorldCom whistleblower case. WorldCom started as a small company during the 1980s, it then skyrocketed throughout the 1990s, and in 2001 the telecom market was saturated and WorldCom’s earning began to fall.

Cynthia Cooper received her undergraduate accounting degree from Mississippi State University and her Master of Accounting degree from the University at Alabama and became a Certified Public Accountant. Cooper was the former Vice President of Internal Audit at WorldCom and unraveled a $3.8 billion fraud that was ultimately over $11 billion and assisted in sending once of the country’s largest and most visible companies into bankruptcy. The following sections describe different sections of the Sarbanes Oxley Act of 2002 and how they relate to the story of Cynthia Cooper.

Sarbanes Oxley Act Section 301.4

This section of Sarbanes Oxley refers to complaints received. The audit committee of a company should establish procedures for the receipt, retention, and treatment of complaints that are received by the issuer regarding the company’s accounting, internal accounting controls, or other auditing matters. A company’s audit committee should also have procedures for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters. The purpose of instating a policy like this is to encourage all employees to disclose any suspicious activity that could impact the company, customers, shareholders, or the public without the possibility of retaliation. Unfortunately Cooper did not have a policy as such in place and she took a large risk exposing the fraud WorldCom committed.

Institute of Internal Auditors Standards...