ACCT 6650 70i, Justin Matthews, Presentation #2 (Whistleblower-Cynthia Cooper) — Transcript

Full transcript

1. 0:01hi my name is Justin Matthews today I'll
2. 0:05be presenting a case titled Cynthia
3. 0:07Cooper The
4. 0:09Whistleblower let's discuss some of the
5. 0:12facts Cynthia Cooper was the head of
6. 0:15internal audit at Worldcom Worldcom was
7. 0:18a leading competitor in the
8. 0:20telecommunication industry in the late
9. 0:231990s however in 1999 and 2000 the
10. 0:27telecommunication industry faced many
11. 0:31difficult
12. 0:32challenges as new competitors and new
13. 0:35technology rapidly came to the market
14. 0:38Worldcom struggled to keep up worldcom's
15. 0:42main goal was to become the number one
16. 0:45stock on Wall Street CEO Bernard eers
17. 0:48and CFO Scott Sullivan did anything and
18. 0:51everything they could do to maintain
19. 0:53their High status on Wall
20. 0:55Street they even resorted to unethical
21. 0:59and illegal accounting behaviors and
22. 1:02transactions to maintain this High
23. 1:06status as Cynthia Cooper became aware of
24. 1:10the unethical and illegal behavior
25. 1:12taking place at Worldcom she realized
26. 1:14she was faced with a major ethical
27. 1:17dilemma she realized that there was
28. 1:19mainly three choices she could choose
29. 1:21from option one was to blow the whistle
30. 1:24and risk thousands of people's career
31. 1:27retirement and
32. 1:28livelihood option
33. 1:30two assist Scott Sullivan in the cover
34. 1:33up he did explain that he would be able
35. 1:37to fix it in just a few short months or
36. 1:40in the next
37. 1:41quarter or step or option three she
38. 1:44could pass the information to the
39. 1:46external Auditors and do no
40. 1:50more in chapter 4 of managing business
41. 1:53business ethics written by lindra Linda
42. 1:56Travino and Katherine
43. 1:58Nelson we read about seven steps to
44. 2:00blowing the
45. 2:02whistle let's compare these seven steps
46. 2:06to Cynthia Cooper's
47. 2:08experience step one approach your
48. 2:10immediate supervisor
49. 2:12first Cynthia Cooper did approach her
50. 2:15immediate supervisor Scott
51. 2:17Sullivan however during the
52. 2:19confrontation Scott Sullivan asked
53. 2:21Cynthia to delay the audit until the
54. 2:23next
55. 2:24quarter Cynthia knew that this was wrong
56. 2:27she continued on with her investigation
57. 2:30step two discuss the issue with your
58. 2:33family in the beginning Cynthia was
59. 2:36trying to be as secretive as possible
60. 2:38and not let anybody know what she was
61. 2:40doing in this
62. 2:41investigation however over time her
63. 2:43family her parents and her her husband
64. 2:46began to see the stress and unhappiness
65. 2:48in her life eventually she shared some
66. 2:51Minor Details with her parents regarding
67. 2:54what was happening at
68. 2:56Worldcom step three take it to the next
69. 3:00level after Cynthia Cooper tried to
70. 3:03discuss the matter with Scott Sullivan
71. 3:06and that failed she discussed the issue
72. 3:09with Mr bobbit Mr bobbit was head of a
73. 3:13was head of the audit committee at
74. 3:15Worldcom step four contact your
75. 3:18company's ethics officer Cynthia Cooper
76. 3:21didn't have an Ethics officer to discuss
77. 3:23the matter with prior to these types of
78. 3:26cases ethics officers were not common in
79. 3:30most
80. 3:32businesses step five consider going
81. 3:35outside your chain of command Cynthia
82. 3:38Cooper did go outside her chain of
83. 3:40command rather than just discussing the
84. 3:43matter with Scott Sullivan the CFO she
85. 3:45talked to the controller David
86. 3:48Meyers Buford Yates the general director
87. 3:51of accounting and two senior accountants
88. 3:55Betty Vincent and Troy
89. 3:57Norman each time she discussed the
90. 3:59matter with these other
91. 4:01outside accountants outside of her
92. 4:05command each of them gave different
93. 4:07various answers regarding their
94. 4:10involvement with the issue with the with
95. 4:11the case and the
96. 4:14investigation step six go outside the
97. 4:17company Cynthia Cooper attempted two
98. 4:20times to discuss the matter with the
99. 4:22Auditors from Arthur Anderson each time
100. 4:25they discredited her investigation and
101. 4:27her
102. 4:28findings saying that they direct they
103. 4:31report directly to Scott
104. 4:34Sullivan eventually Mr bobit told
105. 4:37Cynthia Cooper to discuss the issue with
106. 4:40the newly hired Auditors
107. 4:43KPMG step seven leave the company
108. 4:46Cynthia Cooper chose not to leave the
109. 4:48company she took it upon herself as the
110. 4:51internal auditor to uncover the illegal
111. 4:54and unethical accounting transactions
112. 4:57that were taking place within world C
113. 5:01in conclusion Worldcom filed bankruptcy
114. 5:05in
115. 5:062002 Bernard eers the CEO was sentenced
116. 5:09to 25 years in prison he continually
117. 5:12pled not guilty until the very all the
118. 5:14way to the end but eventually he
119. 5:17received his sentence of 25 years in
120. 5:19prison Scott Sullivan the CFO assisted
121. 5:23the prosecution of Bernard ever and
122. 5:26received a reduced sentence of 5 years
123. 5:28in prison Cynthia Cooper has become one
124. 5:31of the great examples of moral courage
125. 5:33in our day we can all learn a great deal
126. 5:37about moral courage and standing up for
127. 5:39what we know is right and ethically True
128. 5:42by following the example of Cynthia
129. 5:44Cooper The
130. 5:48Whistleblower