BY: MICHAEL BARRIER
MCI Vice-President of Internal Audit, Cynthia Cooper
believes that where ethics are concerned, you have to obey your
conscience and accept the consequences.
F OR 75 YEARS, TIME’S ANNOUNCEMENT OF ITS Person of the Year has been a major news event.7 Last January, 2003, three women shared the honor, and one of them — Cynthia Cooper — is an internal auditor. A vice president of internal audit for the huge long-distance carrier formerly known as WorldCom Inc. (now MCI), Cooper was singled out for praise as a whistle-blower, along with U.S. Federal Bureau of Investigation agent Colleen Rowley and Enron executive Sherron Watkins.
During an audit in May 2002, Cooper discovered that some of WorldCom’s financial practices were shady. The company, then based in Clinton, Miss., had been classifying operating costs as capital expenditures, thereby inflating its profits. She took her findings to the audit committee of WorldCom’s board in June 2002.
Within days, the board fired WorldCom’s high-flying chief financial officer (Ci’O), Scott Sullivan, and revealed to the investing public — and government regulators that the company had overstated its profits by what ultimately proved to be at least 11 billion. It was the biggest fraud in U.S. corporate history. WorldCorn declared bankruptcy in July 2002, after its stock’s value had declined by si8o billion and its founder, Bernard Ebbers, had left the company. The telecom giant’s collapse, coupled with Enron’s, was the catalyst for U.S. Congress’ passage of the U.S. Sarbanes-Oxley Act of 2002 and the adoption of reforms by the U.S. Securities and Exchange Commission and other regulatory bodies.
As shocking as the WorldCorn debacle was, it had its bright side in the courage and integrity shown by Cynthia Cooper and her fellow internal auditors at the company. Thanks to them, there is every prospect that such frauds will be more rare in the future and the U.S. economy stronger as a result. Cooper recently shared with Internal Auditor her thoughts on her WorldCorn experience and the lessons it holds for other internal auditors.
How do you feet about being named one of Time magazine’s 2002 Persons of
Times choice was largely symbolic in that we represent the thousands of men and women who go to work every day, give their best, and try to do the right thing. Sherron, Colleen, and I are all ordinary people who were trying to do our jobs and found ourselves in extraordinary circumstances.
What has helped to see you and your team through this rough period?
During this difficult time, MCI employees have remained focused on moving forward. There are 55,000 hard-working employees who have suffered due to the actions of a few. Although we have read about the various corporate scandals of the past few years, it is important to remember that most people are honorable. Great harm has been inflicted on individuals as well as the capital markets. Many people have lost jobs and retirement savings, careers have been ruined, and families have been devastated. Today, MCI has a new board of directors and executive team, including a new chief execu-tive officer (CEO), Michael Capellas; a new CEO; and a new audit committee chairman, who is the former chaiman of the Financial Accounting Standards Board. These executives, along with our court--appointed monitor and employees from MCI, Deloitte Consulting, and IKPMG continue to work tirelessly to move 1\ICI forward.
Over the past i6 months, my team and I have, in many ways, been at the center of a storm. On a personal note, my faith, family, and friends have helped see me through this difficult time. We have received hundreds of letters f encouragement and support, including many from peers in the profession. The staff at has been extremely supportive and encouraging. One of the first people to send a note was Bill Bishop, president of The IIA.
This interview continues for several pages – if interested
INTERNAL AUDITOR Magazine
December 2003, (pgs. 52 - 53+)
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