Business Case Studies & Business Publications

Cynthia Cooper and WorldCom (A)

Werhane, Patricia ...

Case

Cynthia Cooper and WorldCom (A)

Werhane, Patricia H.; Mead, Jenny

E-0279 | Published February 14, 2005 | 10 pages Case

Collection: Darden School of Business

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This case details the in-house discovery of WorldCom's fraudulent accounting practices and the ethical considerations employees faced during the investigation. In May 2002, Cynthia Cooper, vice president of internal audit for WorldCom, the second-largest telecommunications company in the United States, faced an extremely difficult decision. After months of sleuthing, initially not sure what they were seeking, she and two of her employees at the Clinton, Mississippi, WorldCom headquarters had discovered almost $4 billion in questionable accounting entries. The specter of the Enron collapse in the fall of 2001 still loomed large, and Cooper realized that the situation at WorldCom might even be a far greater financial debacle. If this fraud were revealed, much would be at stake: the company's credibility, the fate of thousands of employees, and pension funds loaded with WorldCom stock.

1.To consider the moral demands a company's employees face, and how to reconcile them in a situation of deep consequence. 2.To better understand what might help shed light on what might be the right course of action. 3.To think about how a person can reconcile his or her obligations to live and act with integrity while also trying to serve one's business and community well.