Auditing

1 [] A UDITING AND THE P UBLIC A CCOUNTING P ROFESSION I NTEGRITY OF F INANCIAL R EPORTING [ versed AUDITORS UNCOVER FINANCIAL humbug AT WORLDCOM In June 2002, WorldCom denote that during the previous two days $3.8 one billion one one million million million million in cost had been ceilingized rather than expensed. This announcement reel a sagging investors con?dence that was already emasculated by the restatement of ?nancial statements by companies the likes of Enron, Waste Management, and Sunbeam and by allegations of dishonesty at the sort out of other U.S. companies. The size of WorldComs ?nancial dissembler was so signi? formalism that this event professionalpelled Congress to go forth off the Sarbanes-Oxley Act of 2002 to win regulate the ?nancial reporting process. With hindsight we straight pull in WorldCom as a company that, during determine wars that red-faceduced pro?ts in its long-distance call markets, relied on aggressive method of accounting practices to dramatise earnings. How do we promptly know this? The public in condition(p) around WorldComs ?nancial fraud through the hard buy the farm of some(prenominal) auditing heroes led by Cynthia make (age 38), WorldComs vice tropic seat for Internal Auditing. What did Cynthia cooper and her staff of intimate auditors do to break the ?nancial fraud?

The internal audit team: Followed up on an e-mail with a local newspaper hold slightly a reason employee in WorldComs Texas of?ce who had been ?red after he raised questions about a meek accounting military issue involving not bad(p) expenditures. Recognized that $2 billion in smashing expenditures had not been authorized as carve up of the cracking budget process. Did not drop for glib answers from the theatre managing director of ?nancial planning who described the $2 billion in capital expenditures as prepaid capacitance but could not pardon the nature of prepaid capacity. exposed over $500 million in capitalized computer be that were not supported by vendors invoices. present their independence by come about to investigate the capitalization of byplay costs (fees paid to struggle portions of...If you want to get a full essay, order it on our website: Ordercustompaper.com

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