Library:Extraordinary Circumstances
| Extraordinary Circumstances: The Journey of a Corporate Whistleblower | |
|---|---|
| Author | Cynthia Cooper |
| First published | 2008 |
| ISBN | 978-0-470-12429-1 unverified |
| Role | Primary source |
| Domains | Business, Finance & Scams |
| Tactics | Fraud or Scam Statistical & Evidentiary Distortion |
Extraordinary Circumstances: The Journey of a Corporate Whistleblower is a 2008 book by Cynthia Cooper.
Summary
Cynthia Cooper was vice president of internal audit at WorldCom, the telecommunications giant, when she and her small team uncovered one of the largest accounting frauds in history. In this memoir she describes growing up in Clinton, Mississippi, where WorldCom was headquartered, joining the company, and the months in 2002 when her team found billions of dollars in improper accounting entries. Time magazine named her one of its Persons of the Year for 2002, alongside two other whistleblowers.
The company
Cooper describes WorldCom's rapid growth through acquisitions under chief executive Bernard Ebbers and the pressure to meet Wall Street's expectations. She portrays a culture in which the finance department, led by chief financial officer Scott Sullivan, was powerful and questioning was discouraged.
The investigation
In 2002 Cooper's team began examining capital expenditure records after concerns were raised about how certain costs were recorded. They discovered that billions of dollars in ordinary operating expenses, fees paid to other telephone companies, had been recorded as long-term capital investments, turning losses into apparent profits. Cooper describes working late at night to avoid attention, the pressure she felt when senior executives asked her to delay her work, and her decision to take the findings to the head of the board's audit committee. WorldCom announced the problem in June 2002 and filed for bankruptcy weeks later.
Personal cost
A large part of the book deals with the personal toll of blowing the whistle: isolation, anxiety and the difficulty of turning against colleagues and a company central to her hometown. Cooper also reflects on why people go along with wrongdoing and on the importance of ethical courage.
Relevance to Bullshitopedia
Extraordinary Circumstances is a first-hand account of how internal auditors exposed a fraud that external auditors and regulators had missed. It shows the pressures that keep insiders silent and the importance of protecting those who speak up.
Related entries
- WorldCom's reported profits
- Enron's reported profits
- The Smartest Guys in the Room (McLean and Elkind)