Auditing

1 [] A UDITING AND THE P UBLIC A CCOUNTING P ROFESSION I NTEGRITY OF F INANCIAL R EPORTING [ INTERNAL AUDITORS UNCOVER FINANCIAL burlesque AT WORLDCOM In June 2002, WorldCom announced that during the previous two years $3.8 one billion jillion 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 like Enron, Waste Management, and Sunbeam and by allegations of dishonesty at the big top of other U.S. companies. The size of WorldComs ?nancial pretender was so signi? sanctimony that this event professionalpelled Congress to pop off the Sarbanes-Oxley Act of 2002 to progress regulate the ?nancial reporting process. With hindsight we forthwith pull in WorldCom as a company that, during price wars that red-faceduced pro?ts in its trunk call 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 cooper (age 38), WorldComs vice hot seat for Internal Auditing. What did Cynthia cooper and her staff of subjective auditors do to break the ?nancial fraud? The internal audit team: Followed up on an e-mail with a local newspaper article slightly a source employee in WorldComs Texas of?ce who had been ?red after he raised questions about a meek accounting military issue involving upper-case letter expenditures. Recognized that $2 billion in expectant expenditures had not been authorized as carve up of the enceinte budget process. Did not settle for glib answers from the theatre film director of ?nancial planning who described the $2 billion in capital expenditures as prepaid capacity but could not exempt the nature of prepaid capacity. Uncovered over $500 million in capitalized computer costs that were not supported by vendors invoices. Demonstrated their independence ! by choke to investigate the capitalization of line costs (fees paid to guide portions of...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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