Case 3.4 - 1. At the time Cynthia Cooper discovered the...

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1. At the time Cynthia Cooper discovered the accounting fraud, WorldCom did not have a whistleblower hotline process in place. Instead, Cynthia took on significant risks when she stepped over Scott Sullivan's head and notified the audit committee chairman of her findings. Conduct an Internet search to locate a copy of the Sarbanes-Oxley Act of 2002. Summarize the requirements of Section 301.4 of the Act. SEC. 301. PUBLIC COMPANY AUDIT COMMITTEES. 301.4 COMPLAINTS .—Each audit committee shall establish procedures for (A) the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and (B) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters. 3. As Vice President of Internal Audit, Cynthia Cooper reported directly to WorldCom's CFO, Scott Sullivan, and not to the CEO or audit committee. Research professional standards of the Institute of Internal Auditors to identity recommendations for the organizational reporting lines of authority appropriate for an effective internal audit function within an organization. 1100 – Independence and Objectivity The internal audit activity must be independent, and internal auditors must be objective in performing their work.
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This note was uploaded on 04/27/2010 for the course ACCT 8610 taught by Professor Kyies during the Spring '10 term at Glion Institute of Higher Education, Montreux.

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Case 3.4 - 1. At the time Cynthia Cooper discovered the...

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