Cost transfers designed to achieve higher profit levels

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The corporate scandal involving WorldCom regrettably illustrates improper cost transfers designed to achieve higher profit levels. WorldCom did not transfer the cost from leases from the balance sheet to the income statement as quickly as they should have. This had the effect of overstating assets on the balance sheet and net income on the income statement (more information on WorldCom can be found via world wide web).

Cynthia Cooper and her colleagues are worried about their revelations bringing down the company. Cynthia’s boss, CFO Scott Sullivan, asks her to delay reporting her findings for one quarter. She and her team do not know for certain whether this additional time period might give Sullivan time to "save the company" from bankruptcy.

Now, assume that you are a member of Cooper's team. Discuss the decision-making situation. Explain how employees should react when ordered by their employer to do something they do not believe in or feel uncomfortable doing.

Reference no: EM132079599

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