Litigation

Extraordinary Circumstances: The Journey of a Corporate Whistleblower, by Cynthia Cooper

By Tracy Coenen

Cynthia Cooper was a true corporate whistleblower. She became famous, not by choice, but because of the WorldCom financial statement fraud valued at $11 billion. She was the Vice President of Internal Audit at WorldCom, a position that was not easily obtained. She almost single-handedly created the internal audit department at WorldCom, and her book Extraordinary Circumstances: The Journey of a Corporate Whistleblower details the struggle to get management to take internal audit seriously.

Things started going wrong at WorldCom very early. The company went on an acquisition spree, and the merging of many small companies, managers, and accounting systems was a disaster waiting to happen. Cynthia says that WorldCom was much better at acquiring companies than integrating them, and that is clear.

From an accounting perspective, it was next to impossible to create a properly controlled system. There were too many small systems being pieced together, and it was easy for numbers and authorizations to get lost in the shuffle. This struggle is well-documented by Cynthia, who no doubt painstakingly researched the various acquisitions in order to give such a complete history. (more…)

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Full post as published by The FRAUDfiles Blog on April 05, 2008 (boomark / email).