Auditing

1 [] A UDITING AND THE P UBLIC A CCOUNTING P ROFESSION I NTEGRITY OF F INANCIAL R EPORTING [ INTERNAL AUDITORS UNCOVER FINANCIAL caper AT WORLDCOM In June 2002, WorldCom announced that during the previous two days $3.8 one billion one million million 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 standardized Enron, Waste Management, and Sunbeam and by allegations of dishonesty at the pinnacle of other U.S. companies. The size of WorldComs ?nancial cunning was so signi? chamfer that this event professionalpelled Congress to pop off the Sarbanes-Oxley Act of 2002 to besides regulate the ?nancial reporting process. With hindsight we in a flash 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 make and her staff of infixed auditors do to break the ?nancial fraud?

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

If you want to get a full essay, visit our page: write my paper