Business ethics, accounting, worldcom, auditing - internal


"About two weeks before internal auditors at WorldCom began questioning capital expense adjustments, the Fort Worth Weekly (cite below) published the story of Kim Emigh, who was fired for questioning inappropriate accounting practices at WorldCom. The article first caught the attention of Mark Abide, the director of property accounting at WorldCom. On May 21, Mr. Abide forwarded the article to Glyn Smith on the internal audit staff, with a note saying that the allegations of the accounting misdeeds by Emigh were ‘worth looking into’ (Krim 2002). The internal auditing team, headed by Cynthia Cooper, met on May 29 to discuss the article and the results of a recent audit concerning overcharges by a group of contractors. At that meeting, the auditors focused on manipulations to the company's capital expenses. ""The internal audit team resolved to make tracking down the adjustments a top priority. … Within a month the auditors had discovered that $3.9 billion in operating costs were improperly accounted for as capital expenses'' (Malone 2002). Later, in a comment to the Fort Worth Weekly, Mr. Emigh is quoted as saying ""It's a pretty amazing world. It just shows that a little bit of determination and standing up for what's right can accomplish more than I ever imagined'' (Malone 2002). "

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