Boeing Whistleblowing

Boeing Case Study: Sarbanes-Oxley Act's Internal Control Mandates and Whistleblowing

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Boeing Case Study: Sarbanes-Oxley Act's Internal Control Mandates and Whistleblowing

Similar to other public companies, Boeing intends to comply with the Sarbanes-Oxley Act's (SOX) internal control mandates. To ensure that its internal audit committee sufficiently handled all requirements, Boeing contracted with PricewaterhouseCoopers (PwC) auditors for additional support. In January 2007, Matthew Neumann and Nicholas Tides, two employees assigned to Boeing's internal audit department, noticed significant problems in their company's IT financial reporting controls. This essay determines the ethical requirements of an internal

Boeing’s policy requires employees to refer questions of any kind from the media to the Communications department first. Furthermore, it prohibits the disclosure of company information in the absence of the said department's review and approval (Case 3.8, p. 322). Boeing is right to terminate Neumann and Tides because not only were they aware of this policy, they also did not direct their media communication concerns to the right department. Instead, they talked to the media without informing their company first. They also disclosed internal control issues without the prior review and approval of the Communications

SOX Section 806 “Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud” offers protection to whistleblowers who faced any kind of retaliation from employers or other entities. Boeing’s termination of Neumann and Tides cannot be protected under Section 806 as they did not report to the right groups, specifically a federal regulatory or law enforcement agency, the U.S. Congress, or a person with supervisory authority.

Assessment of the Courts’ Decision over Neumann and Tides’ Dismissal Charges As per Section 806, Neumann and Tides may not be able to access whistleblower protections. Instead of going to supervisors who can investigate this matter, federal/regulatory agents, and the U.S. Congress, they spoke directly with the media. Although Neumann and Tides mentioned their IT internal control security controls to their managers, they did not pursue other formal company reporting measures. Thus, the courts could not provide whistleblower protections to Neumann and Tides who did not meet the reporting requirements.