Financial Audits Essay

307 Words2 Pages
In the case of “Cynthia Cooper and WorldCom”, the accounting activity taking place clearly violated the ACIPA Code of Professional Conduct. Accounting dishonesty is the key activity involved in this case. It was noted in this case, that these unethical practices had taken place in upper authority, even down to lower level employees. Early on in this case, accounting statements were supplied; which raised red flags. The accounting statements were capital spending schedules, which differed in spending amounts (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011). When audit personnel, Cynthia Cooper, required an explanation for the difference in the capital spending schedules; finance directors explained it as “prepaid capacity”, but had no knowledge of what “prepaid capacity” meant (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011). The case from here became even more tainted with dishonest practices and explanations. Cynthia Cooper and Glyn Smith meet with numerous WorldCom directors, executives, and external partners to gained a more in depth understanding of the situation; but continued to receive the run around. There were some WorldCom directors who made entries, but didn’t know what they were for and GAAP support (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011). An audit committee meeting took place, where the truth was reveled about the “prepaid capacity” and the misleading entries. It was mentioned that there were good business reasons but no accounting rationale for the entries (Cynthia Cooper and WorldCom). According to Mintz, “the due care standard calls for continued improvement in the level of competency and quality of services by performing professional services to the best of one’s abilities” (Mintz and Morris, Ch.1, 2011). Mintz, S. M., & Morris, R. E. (2011). Ethical Obligations and Decision Making
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