Bernie Ebbers and Scott Sullivan

What agency bases did Bernie Ebbers and Scott Sullivan rely on to rush away with accounting system fraud? The power bases are legitimate power, reward power, lordly power, expert power, referent power. Case reading Bernie Ebbers built WorldCom Inc into unity of the largest telecommunication firms. in so far he and chief financial officer Scott Sullivan drive home lead better known for creating a large corporate accouting fraud that led to the largest bankruptcy in US history. Two inquiring reports and subsequent court cases concluded that WorldCom executoves were answerable for billions in fraudulent or unwarranted accouting entries.How did this mammoth accouting scandal occur without anyone education the alarm? Evidence suggests that Ebbers and Sullivan help tidy power and twist that pr even soted accouting staff from complaining, or even knowing, about the fraud. Ebbers inner mickle held tight control over the light of all financial information. The geographical ly discharge accouting groups were discouraged from sharing information. Ebbers group also restricted distribution of company aim financial reports and prevented sensitive reports from being brisk at all.Accountants didnt even have chafe to the computer files in which some of the largest fraudulent entries were mde. As a result, employees had to rely on Ebbers executive team to justify the accounting entries that were requested. An different reason why employeees complied with supposed accoutong practices was that CFO Scott Sullivan wielded immense in-person power. He was considered a "whiz kid" with faultless integrity who had won the prestigious "CFO Excellence Award. quot Thus, when Sullivans office asked staff to nonplus questionable entries, some accountants assumed Sullivan had ground an innovative and legal accouunting loophole. If Sullivans influence didnt work, other executives took a much coercive approach. Employees cited incidents where they were in public berated for questioning headquarters decisions and intimidated if they asked for more information. When one employer at a setoff refused to alter an accouting entry , WorldComs contoller threatened to zap in from WorldComs Mississippi headquarters to conduct the change himself.The employ changed the entry. Ebbers has similar influence over WorldComs board of directors. Sources indicate that his personal charisma and intolerance of dissention produced a dormant board that rubber-stamped most of his recommendations. As one report concluded The Board of Directord appears to have embraced suggestions by Mr. Ebbers without question or dissent, even under circumstances where its members now quickly acknowledge they had significant misgivings regarding his recommendedd couse of action.