SUMMATIVE ASSIGNMENT
Background
Cynthia Cooper was a typical accounting student as an undergraduate at Mississippi State University in the USA. Growing up in a family with a modest income, she attended the local high school and worked part-time as a waitress. After graduation, she went on to complete a Masters in Accounting at the University of Alabama and became a chartered public accountant.
Like most, Cynthia never thought she would face the challenge of her lifetime before reaching the age of 40. However, a few short weeks in May and June of 2002 changed her life forever. The case summarises how she unravelled a $3.8 billion fraud that ultimately grew to over $11 billion and sent one of the USA’s largest and most visible companies to its knees in bankruptcy.
Working for WorldCom
Cynthia joined the company that eventually became Worldcom after returning from Alabama to her hometown of Clinton, Mississippi in the early 1990s. WorldCom started as a small, closely held company in the early 1980s. Bernie Ebbers moved the headquarters to Clinton, Mississippi because it was the college town of his alma mater, Mississippi College. By 1997 the company had emerged within the telecom industry and caught the eye of many on Wall Street when it launched a bid to acquire the much larger and better know company MCI.
Cynthia enjoyed the rising status of WorldCom’s growth in the business community. She was promoted to Vice President of internal audit in 1999, leading the internal audit function in what became the 25th largest company in the US. WorldCom’s stock price continued to rise through 2000, and she and her colleagues dreamed of retiring early and starting their own businesses.
Establishing internal audit’s role in the company wasn’t easy. WorldCom’s CEO, Bernie Ebbers, was forceful in his dislike for the term “internal controls” and allegedly banned the use of the term in his presence. At one point, Cynthia called a meeting with her boss,...