Whistle Blower Essay

1537 words - 7 pages

A person who discloses the misconduct and criminal activities occur in an organization is called the whistle-blower. Basing on the case, Cynthia Cooper who worked in WorldCom is a whistle-blower. The trip of being a whistle-blower started from 2002, when Cynthia realized the financial fraud in WorldCom. Without the help of the whistle-blower hotline process, she decided to unravel the fraud with her colleagues. However, she would never imagine how difficult it is. Whistle-blower hotlines are special procedures provided to employees or third parties for reporting misconduct and wrongdoing within the companies in a safe and anonymous way. Through ...view middle of the document...

Keeping a good reputation do not only attract customers but also get skillful staffs. In order to maintain a good image in the eyes of the public, the companies should avoid any illegal activities and fraud. In WorldCom's case, without the hotline process, the fraud could not be detected earlier by the management of WorldCom. It is too late to solve the fraud internally when Cynthia reported the issue to the audit committee chairman. The fraud was disclosed to the public and led to a significant impact on WorldCom's reputation. WorldCom faced the risk of bankruptcy at that moment. -Motivating staffs speak out their concern. As the result of the call can be made anonymously and secretly, the employees are encouraged to report the unethical activities without the fear of retaliation and termination of employment. In the case, the investigation which Cynthia carried out was already knew by her boss, Scott Sullivan and her boss were involved in the fraud. This caused tremendous resistance and pressure to Cynthia. She and other staffs were forced to continue the investigation at night. Without the help of whistle-blower hotline, Cynthia continued her research transparently, which may place herself in danger. Through the effective corporate whistle-blower hotlines, the businesses do not only create a culture of openness but also manage wrongdoing internally. Therefore, the way to run an effective corporate whistle-blower hotline becomes the primary concern for every business. Here are some assumptions on operating an efficient whistle-blower hotline: -Making sure the hotline process is reliable and complying with the Sarbanes-Oxley Act. The most important thing for an effective whistle-blower hotline process is the whistle-blower protection. The whistle-blowers are the sensitive people in the business and they will ensure the reliability of the process before they report the illegal activities. In order to let the whistle-blowers be confident in the hotline procedure and apart from the fear of retaliation, the personal data or reports should be kept 100% securely and the hotline process should be independently from the organization or the person that the whistle-blower complain about so that the influence on the reports caused by the interests and conflicts will be minimized. In addition, the whistle-blower hotlines also need to comply with the Sarbanes-Oxley Act. According to the section 806 and 1107 in the SOX, the whistle-blowers will be protected against discrimination and retaliation. Any retaliation caused by employers during the investigation is illegal and will be charged. Complying with the SOX is essential for an effective whistle-blower hotline. In the case, Cynthia's boss-Scott Sullivan played a major role in the fraud. Therefore, the hotline should be separately from Scott to avoid the impact of the outcomes caused by...

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