Worldcom-Accounting-Fraud-世通财务造假案例分析.pptx

Worldcom-Accounting-Fraud-世通财务造假案例分析.pptx

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ACCOUNTINGFRAUDATWORLDCOM,WorldComOverview,WorldComOverview,WorldComOverview,Financialstatements,Definition:

Accountingfraudistheintentionalmisrepresentationoffinancialstatementsinordertoobtainwrongfullyanadvantage,retainabenefit,oravoidadetriment,NatureofAccountingFraud,Pressureto“cookthebook”a）Thegrowingpaceofincomeisgenerallyslowingdownb）Drivenbyinterests（politicalinterestlikepersonalfameandimageinthepublic,economicalinterest）,NatureofAccountingFraud,Typicalmethodsto“cookthebook”CostofassetsInventoryisnotrealFixedassetisfakeUnrealliabilitiesAccountspayablesisovervaluedAccruedexpensesarenotrealInflatedincome,NatureofAccountingFraud,DifferencebetweenearningsmoothingandaccountingfraudConsistencyMatchingConservatismchoosingofaccountingitem,NatureofAccountingFraud,WhatdidWorldComdo:

Accountingfraudintwomethod:

improperreleaseofaccrualsimpropercapitalizationofoperatingexpense,NatureofAccountingFraud,Problems（Internal）,FailuretoacquireSprintThepoorperformance,Lossofstrategicdirection,employeesshouldnotquestiontheirsuperiorsthereisnowrittenpolicies.Eachdepartmenthaditsownrules,Corporateculture,legalfunctionwaslessinfluentialandlesswelcomethaninahealthycorporateenvironmentThecorporategovernancestructureissocomplicatedInformationisnotconsolidated,Organizationalstructure,50%ofnonexecutivemembersNoregularcommunicationDecisionsnotbasedontheinterestofshareholders,butpersonalinterests.,Boardofdirectors,Problems（External）,Formerlybigfive,ExternalAuditor,Fastgrowingsalesrevenue,ExternalAuditor,TestinginformationaccuracyratherthancomparabletestsChangedtheratingfromhighriskaccordingtosoftwaretomoderaterisk,ExternalAuditor,NASDAQstockpricefrom1994to2008,Economicaldownturn,Impactoftheaccountingfraud,FallofWorldCom,FallofWorldCom,WhathappenedonseniormanagementEbbers-CEO25yearsinprisonSullivan-CFO5yearsinprisonMyers-controller1yearinprisonYates-DirofAcctg1yearinprisonVinson-AcctgDept5monthsinprisonManager5monthshousearrestNormand-AcctgDept3probationManager,Boardofdirector12directoragreedtopayatotalof$25mtosettlesecuritiesclassactioncaseInvestmentBankers:

settlementofsecurityclassactionCitiGroup$2.6billionJPMorgan$2.0BOther$1.4BGrubmanandSolomanBrotherSecuritiesAnalystfined$15Mandbannedforlifefrompractice.,FallofWorldCom,AccountingSystemProblem:

Eachdepartmenthaditsownrulesandmanagementstyle.Nobodywasonthesamepage.Solution:

Buildfair,clearandintegratedaccountingsystem.Ensureaccurate,reliableaccountingrecords.,lessonsfromit,AccountingSystemProblem:

employeesshouldnotquestiontheirsupervisorSolution:

Reducemanagementsintervenetothenormaldailyrecording.,lessonsfromit,AuditingSystemProblem:

BettyVinson,SeniormanagerofGeneralAccounting,followedsupervisorsillegalinstructionofrecordentryalthoughherprofessionaljudgmenttellherthatiswrong.Solution:

Builduptheproperauditingsystemthatallowswhistleblowinginternally.,lessonsfromit,AuditingSystemProblem:

InternalCynthiaCooper,HeadofInternalAuditdepartment.Foundtheaccountingissuesbutwasntallowedtocheckindepth.Solution:

Enforcethepowerofinternalauditingdepartment.,lessonsfromit,AuditingSystemProblem:

ExternalConflictof“satisfying”customersandauditingethicsSolution:

SECregulationonexternalauditingfirmsandindustryselfregulationrules.,lessonsfromit,Supposeyouwere:

AmotherfortwokidsInmid40PursuingpromotionWhatyouwoulddoifyouwereBettyVinson?

Ethicalchoices,AsBettyVinson,youcouldhave:

TalktointernalauditingdepartmentandprovidetheinformationButbeforeyoublowthewhistle,alwaysremembertoprotectyourselfby:

Savingtherelevantevidenceidentifythesourcesofsupport,Ethicalchoices,Alwaysremember:

Nojobsisworthbreakingthelawsorcommittingunethicalactions.Yourpersonalintegrityisyourmostimportantasset-youownitandcontrolit!

Ethicalchoices,THANKYOU!