ETHICS F RA U D A N D

INTERNA L C ON T R O L
BUSINESS ETHICS INVOLVES FINDING ANSWERS TO TWO
QUESTIONS:

• HOW DO MANAGERS DECIDE WHAT IS RIGHT IN CONDUCTING THEIR

BUSINESS?
• ONCE A MANAGER HAVE RECOGNIZE WHAT IS RIGHT, HOW DO THEY
ACHIEVE IT?
FOUR AREAS OF BUSINESS ETHICS
COMPUTER ETHICS

• THE ANALYSIS OF THE NATURE AND SOCIAL IMPACT OF COMPUTER TECHNOLOGY AND THE
CORRESPONDING FORMULATION AND JUSTIFICATION OF POLICIES FOR THE ETHICAL USE OF SUCH
TECHNOLOGY.
• THIS INCLUDES CONCERNS ABOUT SOFTWARE AS WELL AS HARDWARE AND CONCERNS ABOUT NETWORKS
CONNECTING COMPUTERS AS WELL AS COMPUTER THEMSELVES.
LEVELS OF COMPUTER ETHICS

• POP COMPUTER ETHICS

• PARA COMPUTER ETHICS
• THEORETICAL COMPUTER ETHICS
 MAIN COMPUTER ETHICS ISSUE
1. PRIVACY
2. SECURITY (ACCURACY AND CONFIDENTIALITY)
3. OWNERSHIP OF PROPERTY
4. EQUITY IN ACCESS
5. ENVIRONMENTAL ISSUES
6. ARTIFICIAL INTELLIGENCE
7. UNEMPLOYMENT AND DISPLACEMENT
8. MISUSE OF COMPUTERS
 FRAUD

•DENOTES A FALSE REPRESENTATION OF A MATERIAL FACT MADE

BY ONE PARTY TO ANOTHER PARTY WITH THE INTENT TO DECEIVE
AND INDUCE THE OTHER PARTY TO JUSTIFIABLY RELY ON THE
FACT TO HIS OR HER DETRIMENT,
LEGAL DEFINITION OF FRAUD
• FALSE REPRESENTATION - FALSE STATEMENT OR DISCLOSURE
• MATERIAL FACT - A FACT MUST BE SUBSTANTIAL IN INDUCING SOMEONE TO ACT
• INTENT TO DECEIVE MUST EXIST
• THE MISREPRESENTATION MUST HAVE RESULTED IN JUSTIFIABLE RELIANCE UPON INFORMATION, WHICH
CAUSED SOMEONE TO ACT

• THE MISREPRESENTATION MUST HAVE CAUSED INJURY OR LOSS

 TWO LEVELS OF FRAUD

1.EMPLOYEE FRAUD
2.MANAGEMENT FRAUD
FRAUD TRIANGLE

•SITUATIONAL PRESSURE
•OPPORTUNITY
•ETHICS
Figure 3-1 Fraud Triangle
Pressure Opportunity
No Fraud

Pressure Opportunity

Ethics

Fraud
Ethics