Impact of Not Using Ethical Program in Wolrdcom
Added on 2020-05-08
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Running Head: IMPACT OF NOT USING ETHICAL PROGRAM IN WOLRDCOMIMPACT OF NOT USING ETHICAL PROGRAM IN WOLRDCOMNameInstitution
IMPACT OF NOT USING ETHICAL PROGRAM IN WOLRDCOM2WorldCom had neglected the ethical programs in the company saying that it was a waste of time. The ethical program should have saved the mid-level accountants jobs and they would never have served time in jail. Ethic programs are policies set to promote ethical conduct and abiding by the law. Business ethics touches on all aspects of the business. The aspects include human resource, communication, marketing and operation. The business ethics programs is used to create awareness of any ethic issues, reduce misconduct and improve decision making process(Bebbington et al, 2008). In WorldCom the organization lacked a ethical program which could have help the accountant in this case. The company was shut due to the misuse of funds and covering up the process. The process involved three senior members of the company and two mid-level accountants. The company was using so much of their revenue in high rental costs of equipment and infrastructure. The telephone infrastructure which used most of the income include the poles,wires and also the maintenance cost of the equipments.This high cost of the line rental cost reduced earning of the company and increased the cost of future capital raising. The high cost was covered up by the chief financial officer and the financial controller who found out the company was spending so much on the cost of materials and maintenance cost. If the company was using the business ethics much of this would have been avoided. The Financial controller David discovered the problem and reported to his boss the Chief Financial Officer (CFO) Scott Sullivan. Scott saw that it cost them so much coming out clean so they decided to cover the financial statement which the stakeholders receive .The two thought it was an error and that it would be corrected on their next financial year. Scott Sullivan failed to
IMPACT OF NOT USING ETHICAL PROGRAM IN WOLRDCOM3follow business ethics of reporting the matter before it was too late.so much could have been done to reduce the cost of maintenance of renting the equipment. Scott instructed David to adjustthe company financial statement by reducing the line-cost expense so that the company could meet the normal revenue. David who was loyal to his boss did not think it was the best thing to do but at that moment he felt that it would be temporary .Using the business ethics David would have reported the matter despite the instructions of his boss. David also thought it was an error inthe system (Chapman et al, 2007). David had to involve mid-level accountants to change the financial statement of the company, since they could not change the financial statements themselves. David consulted his colleague Buford, an accounting director at the firm about the issue which he had no choice but to help David, Buford had two involve two of his accountants Betty and troy who would give them advise on which specific accounts to change. The accountant who were not comfortable with the situation had to physically change the financial statement themselves since it entry of the financial statements was one of their duties. The accountants made adjustment which involved hundreds of millions of dollars to meet the companies earning expectation. The two accounts change the information with no help in which they I only thought the problem was temporary. The pressure was there since the deadline of releasing the company’s financial statement to the stakeholders had almost reached. If they had not altered the documents their jobswere at risk hence they had to obey the orders of their bosses.Ethical programs would have saved the accounts from losing their jobs .The ethical programs in an organization supports decision-making and ethical thinking. If WorldCom still
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