The major players in WorldCom’s accounting fraud included CFO Scott Sullivan, the General Accounting and Internal Audit departments, external auditor, Arthur Andersen, and the board of directors. The case offers enough to be detailed, allowing for a comprehensive discussion of the pressures that lead executives and managers to “cook the books,” the boundary between earnings smoothing or management and fraudulent reporting, the role of internal control systems and internal audit to prevent or quickly det … Read more »

The major players in WorldCom’s accounting fraud included CFO Scott Sullivan, the General Accounting and Internal Audit departments, external auditor, Arthur Andersen, and the board of directors. The case offers enough to be detailed, allowing for a comprehensive discussion of the pressures that lead executives and managers to “cook the books,” the boundary between earnings smoothing or management and fraudulent reporting, the role of internal control systems and internal audit to prevent or quickly detect accounting fraud, conducted evaluations of governance processes by external auditors and the Board of Directors and follow the pressure and consequences when middle management jobs that they know are wrong. Written by the public record contains numerous quotes the case of an individual in the WorldCom fraud that involved reported captured by the Investigative Committee and the Wall Street Journal article about several of the individuals in the situation.
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from
Robert S. Kaplan,
David Kiron
Source: HBS Premier Case Collection
18 pages.
Publication Date: Apr 29, 2004. Prod #: 104071-PDF-ENG
Accounting Fraud at WorldCom HBR case solution

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