Cynthia Cooper Provides Insight, Perspective on WorldCom Fraud
The Enterprise Risk Management Initiative of NC State’s College of Management featured Cynthia Cooper, former chief audit executive of WorldCom (now MCI), as first presenter in its Fall 2005 ERM Roundtable series. Speaking to a gathering of nearly 300 on Sept. 16, Cooper spoke of her role in discovering and investigating the massive financial statement fraud orchestrated by senior executives of WorldCom. She later spoke with Master of Accounting students at the college.
While her presentation is not available for public distribution, following are several key insights that she provided.
- The organizational “tone at the top” is supremely important to the ethical culture of a corporation.
- The independence of internal and external audit staff must be protected to allow for investigation without threat of recrimination.
- Fraud hotlines and “whistle-blower” protection programs should include not only corporate employees but also customers and vendors transacting with the organization.
Following are two documents that discuss and provide suggestions for the prevention of corporate fraud:
The AICPA Task Force Report “Management Override of Internal Controls: The Achilles’ Heel of Fraud Prevention” (link is below)
The COSO Report “Fraudulent Financial Reporting: 1987 – 1997 An Analysis of U.S. Public Companies”
Click below for a link to the full AICPA report.
Citation: “Management Override of Internal Controls: The Achilles’ Heel of Fraud Prevention” AICPA. Sept. 16, 2005.
