Answered: Do her actions and motives support or…

Social Psychology (10th Edition)

10th Edition

ISBN:9780134641287

Author:Elliot Aronson, Timothy D. Wilson, Robin M. Akert, Samuel R. Sommers

Publisher:Elliot Aronson, Timothy D. Wilson, Robin M. Akert, Samuel R. Sommers

Chapter1: Introducing Social Psychology

Section: Chapter Questions

Problem 1RQ1

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WorldCom's Whistleblower In March 2002, when WorldCom was struggling to coordinate and integrate the complex mess cre- ated by the 65 companies it had acquired, World- Com's then highly respected chief financial officer, Scott Sullivan, moved $400 million from a reserve account and recorded it as "income" in the compa- ny's public financial reports. Alerted to this, Cynthia Cooper, the perfectionist head of World Com's in- ternal audit department, began to secretly examine the company's books at night. She soon discovered that Scott Sullivan (named a "best CFO" by CFO Magazine in 1998) and David Myers, World Com's controller, for years had publicly reported billions of dollars as "capital expenditures" when they were really operating costs, ignored uncollectible receiv- ables, and reported as "income" what were really reserve funds, and did all this with the help of Arthur Andersen, the company's auditor and accounting firm. Though angrily threatened by Sullivan, and risking her job and career, on June 20, 2002, an ap- prehensive Cooper courageously met with the audit committee of World Com's board of directors and told them what had been going on. On June 25, World- Com's directors announced the company had inflated WORLDCOM SCREWED AMERICA rs outside Federal Hall in New York's financial district protest possible settlement between World Com and securities min lung 2002 its profits by over $3.8 billion-an amount later raised to $9 billion in the greatest accounting fraud in his- tory. Sullivan and Myers were arrested; World Com shareholders lost $3 billion; 17,000 World Com work ers lost their jobs; Arthur Andersen was shut down for shredding evidence of other accounting frauds at other firms. Even today, many WorldCom managers and employees do not speak to her and she some- times cries. Says Cooper: "There is a price to be paid. [But] it comes back to the values and ethics that you learn.... The fear of losing my job was secondary to the obligation I felt." 1. Do her actions and motives support or undermine Carol Gilligan's views? What would you say is unique about her or what she did?

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