The company released $150 million in line cost accruals in the Wireless division over Deloris DiCicco’s objections, without any proper support for the entry. Since, there was no proper support, it is not clear whether the accruals were released with or without any analysis of whether the company had any excess accruals in its accounts. In other words, it is not clear if there was any proper basis in reducing line costs. Also, these accruals were not released in the period in which they were identified, but rather in the period in which these were considered needed by the management.
Further, these line costs were reduced by transferring $1...
... middle of paper ...
...ing only on operational audits and totally avoiding financial audits. On the pretext of cost-saving, it clearly avoided any and every function which could overlap with the role of the external auditors. It carried out various “special projects’ assigned to it by Mr. Sullivan; and such projects were purely operational in nature and had no audit purpose.
Lynne, W. Jeter, (2003). Disconnected: Deceit and Betrayal at WorldCom.Wiley. 272 pages.
Swanson,D., (2010). Internal Auditing: Raising the Bar.IT Governance. 301 pages.
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