This is one question and should be answered in a report form following the numbered pattern as heading. The questions below the report is just to assist you do it diligently. As you said I am entitled to three answers this is my two and remaining one if you answer this any subsequent fourth will be paid for Give an overall assessment of the financial statement fraud that occurred at Worldcom. The case study will reflect both the efforts that could have been conducted to uncover the fraud earlier and the different phases of operational auditing. 1.Initial Survey and Engagement Development Which topics covered in the case study should have been part of the business survey conducted by either an internal or external audit to assess the risk to the company? If identified, how would that review have taken place to determine the risk for planning? 2.Planning Phase Which topics covered in the case study could an audit plan have been developed for by the internal audit team to identify areas with material risk to the company? If identified, how would that planning have been conducted to identify a work program? 3.Work Program Phase Which topics covered in the case study could have had a detailed work program developed to identify findings which were putting the company at risk? Develop or find (with attribution) a work program; identify time, staff, and material necessary to carry out that work program. 4.Field Work/Findings Phase Portion What findings could have been found in the event of a targeted operational audit? What tools and techniques could have been utilized? Document a specific test that could identify deficiencies in your efforts and the tools that you used. 5.Recommendations and Reporting Discuss the methods and events in which the findings were reported in the Worldcom case? Were these appropriate or timely? Was the reaction to the findings appropriate and timely? What recommendations would you have provided concerning corporate governance, segregation of duties, and working with the external auditor? To assist you with the analysis, consider the following: 1. Background of Worldcom growth How much of Worldcoms growth was organic? Can a firm grow too rapidly or beyond its managements capabilities? How would an audit team assess growth risk? 2. Corporate culture Does the culture of a firm get reflected in its appetite for risk or vice versa? Is there an audit plan to account for culture; is culture a control or lack thereof? Is it healthy to have aggressive growth targets? 3. Expense to Revenue Is the review of expense ratios to revenue growth a financial audit or an operational audit? Should competitor performance or industry trends be a factor for an operational auditor? 4. Accrual Releases/Expense Capitalization How much influence should senior management have on accounting practices? What prohibits individuals from following policy, or what motivates them to deviate from policy? Why were these early deviations not acted upon to bring accounting back in line with policy? Why was senior management able to report such wide discrepancies from actualities? 5. The Accounting Department/Internal Audit/External Audit Discuss the pros and cons of the relationship and competency of these functions? Were functions segregated enough and independent? 6. Senior Management Is the competency of senior management an operational audit opportunity? Are segregation of duties? Audit Independence and Relationship with External Auditor You will want to answer these questions as you analyze the information provided in the case study, and then integrate them into your document. Use the Internet, textbooks from other courses you have taken, or other references, but be sure to reference them either within the document or at the end. Keep in mind such things as benchmarking and risk management, and do your research