Case Study 1: And the Fraud Continues Discuss the internal control weaknesses that existed at MCI that contributed to the commission of this fraud. Walt Pavlo would not have been able to commit fraud if MCI had better internal controls. Because of the weaknesses in MCI internal control he was able to defraud the company out of approximately 6 million dollars. Because Pavlo helped to create the accounts receivable system he knew its strengths and weaknesses and was therefore was able to manipulate it. There seem to be little segregation of duties and independent verification.
AICPA American Institute of Certified Public Accountants (AICPA) is a voluntary organization of CPAs. The AICPA Code of Professional Conduct focuses on a set of professional and ethical standards followed by CPAs. The primary standard set by the AICPA Code of Professional Conduct is to honor the best interest of the public, even if doing so sacrifices personal gain. The code also focuses on constantly exercising professional and ethical conduct (Mintz & Morris, 2011). The executives at WorldCom knowingly misstated capital spending moving funds from one account to another to hide the reasons for the expenditures, and manipulated financial reporting.
But after some time he found that he had made some mistake in his report. The report had indirect effect on the demand and sales of the product and also the hiring of the employees. He was in making a decision to tell his superior authority about the mistake. But his friend suggested not telling as it may risk his job. After listening to him his decision got bias.
3、 To increase employees who violated company contract and punished to legal. Case #2: Anne Boswin works closely with Robert Acertado The solution of the case is that: 1. Acertado violated the loyalty Code of Ethics and Standards of Professional Conduct when he downloading the model from Greenfield Financial Corporation. Although Anne Boswin developed the financial model and consent Acertado downloads, but the proprietary of the model belongs to the company, not Boswin. 2.
Ethicality of Accounting Activities The WorldCom case is an example of unethical behavior performed by a company by abusing accounting activities to reflect misleading financial information. In this case the main cause of this unethical behavior is greed and neglect by the executives that allowed and encouraged this behavior. On the other hand, WorldCom employee Cynthia Cooper is a prime example of ethical behavior that took place to uncover the wrong doing of individuals. Upon reading an article of a former financial analyst, Cynthia Copper’s mind was intrigued, an audit was conducted on capital spending. In the WorldCom and Cynthia Cooper case unethical behavior was evident in multiple departments and involved top key players that tried to cover up the fraud.
Even when Cynthia was told to drop the investigation, she remained ethical and honest until the truth came out for the public to see. Key Individuals in the WorldCom Case Betty Vinson and Troy Normand Two of the key individuals from WorldCom’s accounting department were Betty Vinson, the accounting director, and Troy Normand, the mid-level accounting director. Both Vinson and Normand made unethical decisions that led to the events of the WorldCom case. Betty Vinson was a key individual who entered some of the falsified amounts into the prepaid capacity accounts. However, when asked by Cynthia Cooper for support or reasoning on why the recorded amounts occurred, Vinson had no answer.
The cost associated with bribery is the abuse of power by the decision-makers and by officers in their respective position. A significant consequence is that bribery and corruption adds to the cost of doing business but, crucially, without adding corresponding value. Instead of the full contract amount going towards the delivery of the product or service, only a portion is productively employed. Another damaging cost to bribery is the unfair evaluations of a tender or procurement bid awarded to the contractor. Bribery promotes inefficiency and ineffectiveness of the business system and adds to the cost of doing business.
If Sheryl Conan uses the direct method as her supervisors wants her to it will distort the cost of goods sold and hides the decline in market value. Investors and stockholders in the company would be harmed if Dick Wright’s preference is used. By using the direct method to write down inventory it would be manipulating critical information that would be used to figure out costs of goods sold; which in turn would give wrong calculations to determine selling prices and to establish profit margins. These incorrect calculations would also mislead possible future investors in the company by not clearly showing the decline in market value. Sheryl Conan should use the allowance method that would reflect that would clearly disclose the decline in market value and not use the other method as her supervisor wants her to.
Discuss (not list or just name) three (3) instances where the Adler’s faced ethical dilemmas of inappropriate behavior while doing covert research. c. Buying and doing drugs d. Help lie about dave being innocent in court e. Helped them with their business 4. What were dangers that they faced by embedding themselves into the upper-level drug world? f. members of deviant groups can become hostile toward a researcher if they think that they are being treated wrongfully and couldn’t have gotten in trouble with the cops 5. At what point in their lives (stressor) did they decide that they were in danger and wanted to end their participation?
The prime motivation behind the decisions of Arthur Andersen’s audit partners was money and lining their own pockets. The desire for money drove partners to ignore the possible outcome of their actions. If they had recognized the precarious position they were in, AA leadership might have corrected the flaw in the AA internal control that allowed the Enron audit failures to happen. AA was the only one of the Big 5 to allow the partner in charge of the audit to override a ruling of the quality control partner. (Brooks, 2007, p. 109) I find this to be an interesting statement from the text and want to ask, “How would someone trained to look for serious situations such as the Enron audit failures not know the position they were in unless completely ignoring the situation for financial benefit?” “The final disintegration of AA was not caused directly by the Enron audit deficiencies, but by a related decision to shred Enron audit documents, and the conviction on the charge of obstruction of justice that resulted.” (Brooks, 2007, p. 111) If the partners did not