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WorldCom Case PDF

Betty Vinson was an accounting manager at WorldCom faced with a difficult choice - whether to commit accounting fraud or keep her high-paying job. Her boss told her to improperly transfer $771 million in costs, which she did despite knowing it was wrong. Over the course of a year, the fraudulent entries took a toll on her health. Betty was promoted and given a raise but ultimately did not make the right decision, as she lost her job, health, and was sentenced to prison. She should have quit or reported the illegal acts rather than committing fraud.

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Rohan Gupta
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61 views

WorldCom Case PDF

Betty Vinson was an accounting manager at WorldCom faced with a difficult choice - whether to commit accounting fraud or keep her high-paying job. Her boss told her to improperly transfer $771 million in costs, which she did despite knowing it was wrong. Over the course of a year, the fraudulent entries took a toll on her health. Betty was promoted and given a raise but ultimately did not make the right decision, as she lost her job, health, and was sentenced to prison. She should have quit or reported the illegal acts rather than committing fraud.

Uploaded by

Rohan Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Name: ___Rohan Gupta____________ BUS 211 Spring 2017, All sections

Circle one (for tub filing): BBA Class of 2017/2018 BBA Class of 2019/Non- BBA

Make-up Case Exercise – Worldcom

Due at the beginning of class on Tuesday, April 18

Betty Vinson was a Worldcom accounting manager faced with a difficult choice. What was that
choice, and do you think she made the right decision? Explain your answer.

Betty Vinson was a loyal employee at WorldCom who worked incredibly hard to manage the

CFO’s plan. She had worked extra hours, while at home, and even on vacation to earn the

position of senior manager in General Accounting. The choice Betty made was between

committing an accounting fraud and keeping her job as senior manager. Her boss told her to

transfer hundreds of millions of dollars in line costs to the income statement. It was a tough

choice because Betty’s job paid more than her husband’s and gave her family insurance

benefits. She knew it would be difficult to find a job with compensation as high as WorldCom’s.

Despite knowing it was wrong, Betty made the choice of following orders and worked on

distributing $771 million of line costs into capital divisions.

She had to continue making such entries for the rest of the year, after the point where it began

affecting her health both physically and mentally. The cost distribution would take off hours from

rest, and Betty would lose out on sleep. She was promoted to director and provided with a raise

0f $80,000, but was it really worth committing an accounting fraud? I don’t think so.

I don’t think Betty made the right decision by committing the fraud. She not only lost her job but

also damaged her health and got sentenced to five months of prison and five months of home

detention. Rather than being caught up in the situation, Betty should have quit her job or

appealed to WorldCom’s legal department (despite the lack of legal presence at WorldCom).

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