[Solved by Experts] Organizational Pressures Influenced Betty
Please reply with at least 150 words to the discussion below. you must support the assertions with at least 2 scholarly citations in APA format. any sources cited must have been published within the last five years.
WorldCom was a telecommunications company involved in cooking the books by $11 billion in earnings, costing investors $30 billion. The fraud was discovered by Cynthia Cooper, vice president of internal auditing; and, the fed became involved, bringing the company to bankruptcy, and Bernie Ebbers (CEO) and Scott Sullivan (CFO) to justice (Mintz and Morris, 2020).
- Explain the role of cognitive shortcomings in the WorldCom fraud and how social and organizational pressures influenced Betty Vinson’s actions.
Betty Vinson was the former corporate reporting executive, and was told to make improper entries, so that “wall street would not be disappointed” (Mintz et. al., 2020). Furthermore, Vinson felt that if she did not make the fraudulent transactions, she would lose her job. Such feelings are due to organizational threats, and the wrongful expectation of her that the reports say otherwise.
In a study on cultural influences to fraud, Connie O’Brien (2020) discusses the influence social pressure has toward fraudulent accounting. In Japan, Toshiba was caught in their fraud after seven years. He explains that due to their corporate culture, “individuals within Toshiba did not feel comfortable speaking up against authority,” fearing that they would be fired, considered as disloyal to the community.
- The SEC action against Vinson was deemed “appropriate and in the public interest.” How was the public interest affected by what Vinson did and World Com’s actions broadly?
Whistleblowing can have positive affect by bringing fraud into light; however, some would argue that it can also bring more harm than good. Never the less, whistleblowers are protected under the Whistleblower Protection Act of 1989 (Quayle, 2021). Vinson could have exposed the wrong, but ended up covering it up; and, while there was no evil intention to do such, it would be best to remove her from the position lest another threatens her, and causes her to comply with more fraud. Public interest does not only include bringing fraudsters to justice, but keeping the public from reckless accounting.
- In a presentation at James Madison University in November 2-13, Cynthia Cooper said, “You don’t have to be a bad person to make bad decisions.” Discuss what you think Cooper meant and how it relates to our discussion of ethical and moral development in the chapter.
While one cannot decipher the intentions of the heart exactly, Betty Vinson admitted that she felt that she would be fired if she did not make the entries. Mintz et. al. (2020) explains that ethics and virtues inform ethical decision making; “instrumental virtues,” which includes courage, directly influence one’s actions. This seems to relate to Mz. Vinson because she did not stand up for what was correct, in fear of losing her job. It is natural and fine to feel fear; however, it is courage that is necessary to keep doing what is right despite the fear. She was not an evil person; Vinson was simply persuaded to do wrong – to make a bad decision.
In the prophets, God tells Isaiah to “fear not, for I am with you; be not dismayed, for I am your God” (English Standard Version Bible, 2001, Isaiah 41:10). The world will test us in many ways, but we can find comfort from our fears, in God. He is the King of the Universe, and cares for the afflicted. Those who keep the way of righteousness will be kept safe by God.
As public accountants, and as anyone who works with the public, it is important that we stand for our values, and the law. We may be threatened, and, if the threat is very harsh, the best advice every accountant and professor I have heard from is: leave the job immediately. Criminal action is destined for the criminal minded, and as for the professional, one must act professionally with public interest.