The corporate scandal involving WorldCom regrettably illustrates improper cost t

Question

The corporate scandal involving WorldCom regrettably illustrates improper cost transfers designed to achieve higher profit levels. WorldCom did not transfer the cost from leases from the balance sheet to the income statement as quickly as they should have. This had the effect of overstating assets on the balance sheet and net income on the income statement (more information on WorldCom can be found via world wide web).

Cynthia Cooper and her colleagues are worried about their revelations bringing down the company. Cynthia’s boss, CFO Scott Sullivan, asks her to delay reporting her findings for one quarter. She and her team do not know for certain whether this additional time period might give Sullivan time to "save the company" from bankruptcy.

Now, assume that you are a member of Cooper's team. Discuss the decision-making situation. Explain how employees should react when ordered by their employer to do something they do not believe in or feel uncomfortable doing.

Explanation / Answer

Hi,

Thanks for the question.

Ethics is all about doing the right thing. The tides may not be in your favor or you may be at a loss with the decision. But if you are following the ethical practices, then it is always the right thing to do. Being ethical defines your belief system in a certain thing. It defines how you see the things - whether they are right or wrong.

But at the same time, being ethical in the organization is really a difficult task. There are several aspects which make following the ethics a bit more difficult:

All the above problems create difficulties for the employees and the corporations. Sometimes internal and external factors combine together to enable the unethical practices in the organization. Knowingly or unknowingly, people tend to fall for the honey trap of unethical practices. This may give the glory for some time but ultimately result is not good for the organizational growth and survival.

In this particular situation, the Coopr team should look at all teh aspects when Sullivan asked to hold back the release. They will be abble to find that the funds were not moved as they should have been and something is very fishy. Now, there are two options:

Even though the supervisor asked to opt for the option two, the ethical asked says that Cooper should opt for option 1 whatever be the conseuences. This will let her not to committ a fraud. At any given point in time, if this comes out then the managers will put the blamme on the Cooper and the team and then the team will be facing the jail time. So it is better to opt for the option one.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.