The Case Analysis Of Accounting Fraud Conducted At WorldCom Case Study Example

Q.1
The section 301.4 of Sarbanes-Oxley Act stands in the favor of the need to have proper system of whistle blowing that can offer protection and privacy to the protector of ethics and civic values in the particular organizational setup. The main purpose of the section is to provide the reporter of a fishy matter protection and privacy so that he or she can enjoy working in the organization without going through emotional and psychological pans.
Q.2
The process of whistle-blowing is a dangerous and coercive one, and therefore, it can change the organizational context of the company altogether. In the given list of circumstances, the organizations have to assume and ensure that the complainants are acting with good faith. The complaints do not have to carry speculative or judgmental tone, and the documents in this regard have to have factual stature that could lead the top management towards opening a detailed investigation. The complaints should provide the executives with probable cause to believe in the potential of wrongdoing in the company.
Q.3
The professionalized standards of internal auditing state that the relevant organizational team has to work under the supervision of the CFO, and therefore, Cynthia had to take the matter to the next level because the character of her immediate boss was corrupt. She violated the standards of her profession, but she had a good reason to do that, and therefore, now policies allow whistleblowers to report directly to the top management if they suspect that something wrong is going on in the company.
Q.4
The section 406 of Sarbanes-Oxley Act operates in order to promote ethical and righteous behaviors in the financial managers of the companies, and they do not have the option to lie on an official report to say the least, and the person holding the title of Chief Financial Officer would have to take a leading role in this regard as well.
Q.5
The life of a whistleblower remains under considerable social pressures because organizations intend to hold onto the practices those appear to have a familiar outlook to the eyes of the organizational staff, but the identifier of the issues would have to suggest abrupt change, and therefore, the resistance to his or her ideas take various forms such as social disconnectedness, depression and psychological consequences as well.
Q.6
The role of whistleblower is receiving a lot of cover from certain sections of Sarbanes-Oxley Act, and therefore, one has to have an analytical mind in order to identify potential of wrongdoings in the organizations, and they have to develop an efficient factual report in this regard so that the management can have logical reasoning in order to investigate the problematic areas. Secondly, the whistleblower will have to have the ability to remain calm in the face of storm, and thirdly, an individual should have a realization that he or she is traveling on the right path, and his or her vested energy would not go to waste as well. I believe that I have the guts and potential to be an effective whistleblower because I can identify the problems, and can also develop concise reports in order to assist the top management in taking corrective measures
Q.7
The practice of whistle-blowing is a challenging one, and therefore, one has to face considerable and significant pains before rectifying ethical flaws in the organizational context so I will suggest that a person must decide that he or she really wants to take on the entire organization singlehandedly, and upon receiving confirmation, I will ask the individual to analytically study the problem, and develop a concise report that will need forwarding to the top management, and the complainant has to follow the due process of whistle-blowing. However, the action is least suggestible, if the target organization does not have a formal system covering whistleblower’s role.
Q.8
The Sarbanes-Oxley’s section 302 argues that the CFO in the organization has to undersign the monetary documents in order to validate the authenticity of the information therein. However, Scott headed the financial department of the company, and therefore, he kept on validating the erroneous accounting practices by vouching personally. The senior management should have reviewed the financial statements in order to identify problems, and the featured section of the act could not have helped WorldCom because the principle assumed that the officers of the company would always behave in the best interests of their employer.
Q.9
The Sarbanes-Oxley Act has a limited application in terms of improving ethical practices in the organizations because it assumes that the organizational managers will act in the best interest of the company all the time, but it rarely happens. The organizations can give less reason to indulge in negative practices by offering monetary and nonmonetary benefits those will have the managers develop organizational commitment and thankfulness towards the companies. As a result of suggested measures, the managers may not conduct actions those can undermine the name of their organization in the market.

References

Mesmer-Magnus, J. R., & Viswesvaran, R. (2005). Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation. Journal of Business Ethics Vol 62(3), 277-297.