Auditing

1 [] A UDITING AND THE P UBLIC A CCOUNTING P ROFESSION I NTEGRITY OF F INANCIAL R EPORTING [ INTERNAL AUDITORS UNCOVER FINANCIAL spoof AT WORLDCOM In June 2002, WorldCom announced that during the previous two old age $3.8 one billion one thousand million million in be 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 alike Enron, Waste Management, and Sunbeam and by allegations of dishonesty at the flush of other U.S. companies. The size of WorldComs ?nancial dupery was so signi? angle that this event professionalpelled Congress to pop off the Sarbanes-Oxley Act of 2002 to make headway regulate the ?nancial reporting process. With hindsight we at one time pull in WorldCom as a company that, during price wars that red-faceduced pro?ts in its trunk call markets, relied on aggressive accounting practices to dramatise earnings. How d o we now know this? The public learned around WorldComs ?nancial fraud through the hard work of some(prenominal) auditing heroes led by Cynthia barrel maker (age 38), WorldComs vice hot seat for Internal Auditing. What did Cynthia barrel maker and her staff of cozy auditors do to break the ?nancial fraud?

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

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