This website uses cookies to ensure you have the best experience. Learn more

Fraud Case Essay

1208 words - 5 pages

CASE 4: ACCOUNTING FRAUD AT WORLDCOM
Betty Vinson: victim or villain? Should criminal fraud charges have been brought to her? How should employees react when ordered by their employer to do something they do not believe in or feel uncomfortable doing?
In discussing whether Vinson should been charged with criminal fraud, it can be analyzed from ethical perspective which can truly judge whether she was morally responsible for the wrong or not. In order to determine whether Vinson was morally responsible for the fraud, these three criteria should be fulfilled first: causality, knowledge and freedom. The causality criteria can be referred as whether that individual caused or helped cause the ...view middle of the document...

Vinson can be considered as one of major players in WorldCom’s fraudulent activities as she was one of those who made the entries for the accrual releases and expense capitalization. Moreover, she also participated in obtaining the account number for the international fixed costs in order to release $370 million accruals when the director of the division, Schneberger himself refused to make the adjustment. In addition, Vinson did all the fraudulent activities without any feeling of uncertainty that the actions were wrong even though she herself had difficulty and personal dilemma to refuse such actions.
Despite those factors, the wrongdoing had inflicted a significant financial and psychological impact on the company and its stakeholders. Her involvement in “cooking the books” had resulted in hundred millions differences between reported and actual line-cost expenses as well as between reported and actual income/loss before taxes and minority interests. The action consequently led the company to bankruptcy and other stakeholders such as the employees, the retail customers and the public were significantly affected. These matters hence proved the seriousness of the wrongdoing thus denies all factors argued for the mitigation of the responsibility.
In summary, Vinson can be considered as a villain as she morally responsible for the wrong and hence should be charged on the criminal fraud.
* * *
Employees are subject to abide the orders from superiors as long as the actions are legal and ethical. Receiving orders to do something they do not believe in or feel uncomfortable doing may indicate that the action is not ethical despite it being legal or not.
The first step that can be taken by employees in resolving such dilemma is consult with the code of ethics for formal guidance. In the WorldCom case however, there were no written policies for the management practices itself yet the code of ethics. Therefore, the employees in WorldCom had no formal guidance to lead them to ethical decision in abiding or disobeying their superiors such as Sullivan, Myers and Yates.
Apart from that, the employees might determine themselves the alternative actions are available to them in that situation. After that, they should weigh up the benefits and costs of the alternatives to themselves as well as to others who might be affected by the action taken. The alternative that produces the greatest benefits then should be chosen. Taking Vinson as example in WorldCom case, she should not only consider about her personal matters besides the company’s sake, but she also should consider the consequences towards the company’s stakeholders before performing the fraud. However, there is underlying problem in this approach where employees...

Other assignments on Fraud Case

And The Fraud Continues Essay

1723 words - 7 pages dollars are involved and the damage can be devastating. 1. Discuss the internal control weaknesses that existed at MCI that contributed to the commission of this fraud. When complex fraud and financial crimes are involved, as in the case of MCI, the first thing that comes to mind is the internal control structure. This is the primary concern –that the internal controls are generally ineffective in preventing fraud and other financial crimes. MCI is

Mortgage Fraud Essay

659 words - 3 pages the tighter requirements needed to qualify individuals for mortgage loans. However on the other hand, foreclosure and delinquencies have increased enormously which, as an extension, has resulted in an increase in mortgage fraud aimed at distressed homeowners. However, as of 2010 the majority of the prevalent schemes per FBI Cases open were Loan Origination Schemes, followed by Title Escrow Settlement fraud, then Real Estate Investment, Short

Accounting Fraud

615 words - 3 pages Accounting Fraud Name: Institution: Course: Date: Accounting fraud Accounting fraud is an intentional manipulation of the financial records so that it looks improved compare to the previous ones. The fraud involves the employee in a business organization embezzling or misappropriating the business resources. Those holding higher positions in financial and accounting offices are the major promoter of the accounting fraud. There has

Cit Case

952 words - 4 pages ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Module 3 - CIT Case 1. Explain the three aspects of the fraud triangle and how these factors enabled fraud to occur at CIT.  The three aspects of the fraud triangle were available in the CIT case. Niakan was the Director of

Platt's Case

604 words - 3 pages living costs, controls all the processes from payroll files generating to the final step, so she has the pressure, rationalization, and opportunity to do the fraud. Base on the factors from this case, there are frauds in Vortex and Dana should responsible for the fraud of Vortex. Moreover, there need a strong inspection on third party-ADP. It would be great if add an additional personnel to make a double check. Furthermore, it needs to enforce

Healthsouth- Summary

362 words - 2 pages Teaching Notes HealthSouth Corporation: Fraud, Greed and Corporate Governance Case Summary During the 1990s, Richard M. Scrushy, the former CEO of HealthSouth Corporation, engineered many acquisitions of rehabilitation clinics, outpatient surgical care operators, nursing homes and other health care companies. Mr. Scrushy had been a respiratory therapist who spotted a niche in the health care market and utilized his entrepreneurial talents

Forensic Accounting

1320 words - 6 pages ’ money that is used for bailing out the troubled financial institutions. Overall this type of fraud is committed in complete disregard of the laws defining the operations of the company as well as the existing legislation and regulations. Therefore, the fraud is in way neglect by the organization from its core responsibilities for the purpose of the executives or the employees to make profits. It is evident in the case of the "Libor" scandal

False Claims Acts: Should They Be Sealed?

2087 words - 9 pages fraud to pay twice the damages and also a $2,000 fine was imposed for every false claim. The reward the citizens got for turning a case or claim in was fifty percent of the damages recovered by the government. The FCA primarily continued through the years with minor changes until 1943, and the Congress made provisions. The provisions started with changing the fifty percent received by the private citizen or whistleblower, thus reducing the

Ispg

1093 words - 5 pages in in the case of a financial fraud and a child pornography case. Later in the paper discusses the procedures that and investigator might take to collect data from a suspect system. I will also provide a simple tool that can be used to collect all type of data from different location, making the investigator job much easier and help maintain the integrity of the evidence collected to be presented in court

Evaaaakkkk

1856 words - 8 pages as defendants in criminal trials for fraud. In the HealthSouth case in observation, real life examples of people who were "just doing their job" but at some point crossed the line from law-abiding citizens to law-breaking villains. Seemingly small compromises in ethics and morality led to a full-scale commitment to fraud. Finally, we will conclude that nobody sets out in their career to end up in prison cleaning toilets and on the front page of

Accounting Scandal Of Worldcom

951 words - 4 pages be seen as a pride of America until it got into one of the biggest accounting scandals in the American history which finally led to its bankruptcy in 2002. On July 21st, 2012, WorldCom filed for bankruptcy, which was worth 103.9 billion USD and became the largest filing at its time. Its CEO, Bernard Ebbers, was found totally guilty and sentenced to 25-year imprisonment regarding the crime of stock and accounting fraud. Before WorldCom, the world

Similar Documents

Accounting Fraud Essay

1285 words - 6 pages ACC 556 Week 5 Assignment 1: Accounting Fraud Strayer University 08 February 2015 Abstract This assignment will investigate the unethical and unlawful activities perpetrated by three members of DHB Industries leadership team. David Brooks was convicted of insider trading, fraud, and obstruction of justice on September 14, 2010. This paper will describe the company and the fraud that was involved, outline an audit plan that could

Fraud Paper

1711 words - 7 pages Submit a 3 page paper that 1) explains the difference between litigating an embezzlement case in civil court and criminal court, and 2) discuss the role of an expert witness/fraud examiner in each proceeding. There are two major factions of the United States court system: civil cases and criminal cases. Both take place in courtrooms all across the country, but there are several differences that separate the two as well as the role of fraud

Computer Fraud Essay

1221 words - 5 pages occurrence of the second public fraud in less than two months that victimized the institution. However, the latest one involved a highly rank white-collar who was able to breach the information system of the company. The following paper will present a summary of the case, including the characteristic of the perpetrator, the detective methods that were used, and the effects on the stakeholders. We will also try to classify the fraud based upon the

Mortgage Fraud Essay

1636 words - 7 pages Michael Morris Case Study number 1 Synopsis: Prior to the 2008 financial crisis the price of a typical United States home had increased by 124 percent (UNC). This appreciation of homes leads to borrowers obtaining subprime adjustable interest rates for a set period (UNC). This money lending boom led to a situation that Coleen Colombo and five other female employees of BNC found themselves in. Coleen, a senior mortgage underwriter that was