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Unformatted text preview: Satin Fye July 26, 2011 AC 562 Group B Professor Cuervo WorldCom: Overstated Revenue The stricter audit rules could have helped prevent the WorldCom scandal. New audit rules like the statement on auditing standards 112 clearly define rules under which communicating internal controls matters identified in an audit can be handled. For instance the auditor cannot be part of a client’s internal control as this impairs the auditor’s independence. Companies should implement other channels of communication other than just employee reporting to management. This is to allow employees within the company an opportunity to blow the whistle without fear in case they notice any major financial irregularities within a company. The whole scandal revolves around ethical issues for accountants. In the world com scandal accountants were instructed to hide bad debts and falsify WorldCom’s books. David Myers WorldCom’s controller said that he followed orders from senior management to make entries that...
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This note was uploaded on 01/29/2012 for the course ACCOUNTING 562 taught by Professor Unknown during the Spring '11 term at Keller Graduate School of Management.
- Spring '11