Fraud and the Tone at the Top

Topics: Employment, Bernard Ebbers, Ethics Pages: 2 (325 words) Published: January 30, 2012
ACC460 –Auditing
Video Case

Fraud and Tone at the Top - Video Case Questions

This video is an informative video made for accounting students and employees that outlines the danger of corruption and fraud in the workplace. The majority of the video is an interview with Walt Pavlo of MCI Worldcom. He explains his case and the steps that lead him to take the actions that landed him in prison. While he is telling his story two gentalmen describe how Walt’s story relates to the world of auditing as a whole and what steps a company and auditors need to take to avoid cases of fraud.

1. What were the three major fraud factors that led Walt Pavlo to commit fraud at MCI Worldcom?

* Meeting Analysts’ Expectations
* Compensation and Incentives
* Pressure to reach goals

2. List five reasons employees don’t report unethical conduct.

* No Corrective Action
* Confidentiality of Reports
* Retaliation by Superiors
* Retaliation by Co-workers
* Unsure whom to Contact

3. List the eight elements discussed in the video that lead to a negative work environment.

* Not Rewarding Appropriate Behavior
* Negative Feedback
* Perceived Organizational Inequalities
* Autocratic management
* Low organizational loyalty
* Unreasonable Goals and Expectations
* Compensation
* Promotional Opportunities
* Organizational Responsibilities

4. List the seven steps management can take to help prevent fraud.

* Ethical Tone at Top
* Promote Effective Internal Controls
* Whistleblower Policy
* Prevent Reprisals
* Ethics and Fraud Training
* Confidential Hotline
* Promote Ethical Environment

While this video is very much set up in a similar manner to a sexually harassment tape you would have to watch for your employer, it is still very interesting. Hearing Walt’s story really gives a feel to what was going on in the Auditing world before all the internal controls went on...
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