Worldcom Ethical Dilemma

Topics: Ethics, Decision making, Risk Pages: 3 (971 words) Published: October 6, 2008
In 1998, Betty Vinson was promoted to a senior manager in the firm’s corporate accounting division. Two years later in her position she experienced a major ethical dilemma. The company WorldCom was a very successful company up until the middle of 2000 when the telecommunication industry entered a protracted slump. The company’s earnings were not Wall Street expectations, and it was saddled with unpaid bills. Vinson’s job was to repair the problem by doing some wrong accounting practices. The ethical dilemma is weather she should or shouldn’t do and the consequences if she does or doesn’t do. What ethical decision should Betty Vinson take?

The first right decision is to do the wrong accounting practice. Vinson was told that it was only one-time transaction. In this situation it is not wrong to do bad accounting practices if it can help the company out. One of the ethical theories to support the dilemma is utilitarianism. Helping out the company would help everyone in the business. It seems like in the accounting department there is none ethical practices and therefore causing this cultural relativism to exist. To some extended surprise it is odd that the upper management would order to do something like that. They have created this culture not to question superiors. Emotism engages some part in this ethical decision too. Sullivan was considered one of the top CFO’s in the country and approved the transaction, than it must be satisfactory. Teleological she would act morally right or acceptable if it produces some desired results such as career growth.

The other decision is not to practice the wrong doings of accounting. It could end up a big risk for her career if she takes the fiduciary duty. The first thing on her mind was Legal Positivism. Accounting rules state that reserves can be established only if there is an expectation that loss will occur in the unit where the reserve is established. To take this process ethically, if the law is “positive” (in...
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