Ethics Assignment: Worldcom Case

664 Words May 26th, 2014 3 Pages
Ethics Assignment: Worldcom case

Introduction: On 21 July 2002, WorldCom, Inc., the then-second largest telecommunications company in the U.S. filed bankruptcy protection. Its failure was due to its executives’ bad business behaviors to manipulate earnings with improper accounting entries. The key persons involved in the fraud were as follows; CEO Bernard Ebbers, CFO Scott Sullivan, the accountants were Bufford Yates (Director of General Accounting), David Meyers (Controller), Troy Norman (Director of Legal Entity Accounting), and Betty Vinson (Director of Management Reporting), pressured by CEO and CFO to prepare improper accounting entries. Those executives and accountants were convicted of securities fraud and received federal jail
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Also, her boss assured her that he would take full responsibility of her actions.
Contrast her behavior to that of Cynthia Cooper – what made them behave differently?
Betty Vinson did not have a fully developed her moral compass, which would have prompted her to either refuse to make the fraudulent entries, or leave her job immediately, if the first was not an option. Additional, Vinson had the moral reasoning of her family (husband and children) not follow ethically correct judgment.
On the other hand, Cynthia Cooper, another World Com veteran, headed WorldCom’s internal audit department, had a strong moral compass of what is wrong and what is right. Despite the fact that she was directly warned by the furious CFO to stay away from the suspicious wireless business unit, Cynthia did not end her investigation. Applying what we learned during the session 1, Cynthia Cooper was more duty-based or Deontologicalist, than Betty Vinson, in a way that she was more concerned with what people do, not with the consequences of their actions.
How do you think you would behave if you had the role of Betty at Worldcom?
If I were Betty, I would not accept the boss’s request when she was first asked to release $828 million of line accruals into the income statement. Not only it is morally wrong, doing so will risk my reputation for my entire life. Also as an accountant, I should have a clear…

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