Auditing

1 [] A UDITING AND THE P UBLIC A CCOUNTING P ROFESSION I NTEGRITY OF F INANCIAL R EPORTING [ INTERNAL AUDITORS UNCOVER FINANCIAL jeering AT WORLDCOM In June 2002, WorldCom announced that during the previous two days $3.8 one billion one thousand thousand million in cost had been ceilingized rather than expensed. This announcement shake a sagging investors con?dence that was already weakened by the restatement of ?nancial statements by companies interchangeable Enron, Waste Management, and Sunbeam and by allegations of dishonesty at the slip away of other U.S. companies. The size of WorldComs ?nancial guile was so signi? hawk that this event professionalpelled Congress to pop off the Sarbanes-Oxley Act of 2002 to only regulate the ?nancial reporting process. With hindsight we straight pull in WorldCom as a company that, during price wars that red-faceduced pro?ts in its long-distance markets, relied on aggressive accounting practices to dramatise earnings. How do we now know this? The public learned around WorldComs ?nancial fraud through the hard work of some(prenominal) auditing heroes led by Cynthia make (age 38), WorldComs vice hot seat for Internal Auditing. What did Cynthia cooper and her staff of innate auditors do to break the ?nancial fraud?

The internal audit team: Followed up on an e-mail with a local newspaper article slightly a author employee in WorldComs Texas of?ce who had been ?red after he raised questions about a meek accounting field involving smashing expenditures. Recognized that $2 billion in jacket crown expenditures had not been authorized as carve up of the chapiter budget proces! s. Did not settle for glib answers from the theatre director of ?nancial planning who described the $2 billion in capital expenditures as prepaid capacity but could not apologize the nature of prepaid capacity. Uncovered over $500 million in capitalized computer costs that were not supported by vendors invoices. Demonstrated their independence by restrain to investigate the capitalization of line costs (fees paid to strike portions of...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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