Chapter 3 Test for Forensic Accounting & Fraud Examination, 1 e Mary-Jo Kranacher ISBN-10; 047043774X Wiley 2010

7/23/2019 Chapter 3 Test for Forensic Accounting & Fraud Examination, 1 e Mary-Jo Kranacher ISBN-10; 047043774X Wiley 2

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Forensic Accounting

By Mary-Jo Kranacher, CPA/CFF, CFE

Chapter 3Who Commits Fraud and Why: Criminoo!y and Ethics

LEARNING OBJECTIVES

3-1 "escri#e occupationa $raud and a#use%3-2 Compare and contrast theories o$ crime causation%3-3 &denti$y the si' situationa cate!ories that cause nonsharea#e pro#ems $rom Cressey(s

research%3-4 "iscuss the essence o$ or!ani)ationa crime%

3- *i+e e'ampes o$ #eha+iora or other en+ironmenta indications o$ $raud%3-! E'pain the reationship #eteen an empoyee(s position and the e+e o$ the$t accordin! to

.oin!er and Car(s research0%3-" Anay)e the roe o$ corporate !o+ernance mechanisms in $raud pre+ention%3-# "escri#e corporate !o+ernance #readons in the $aciitation o$ historica $rauduent acts%3-$ &denti$y ethica issues, con$icts o$ interest, and noncompiance ith corporate poicies and

procedures in the conte't o$ a speci$ic case%3-1% "iscuss aternati+e courses o$ action in a !i+en scenario ithin the $rameor o$

appropriate ethica conduct%

True&F'(se

1-2/F 1% Without +isuay representin! the crime scene, +ery di$$erent concusions

are reached a#out ho committed a crime%

Anser: 2

1-2/F 4% Conspiracy is a means o$ prosecutin! the indi+iduas in+o+ed in ie!a

or!ani)ed acti+ity%

Anser: 2

1-2/F 3% 5e!i!ence appies hen a person acts in a reasona#e and prudent

manner%

Anser: F

1-2/F 6% Cressey caed em#e))ers 7temptation +ioators%8

Anser: F

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1-2/F 9% Accordin! to A#recht, persona inte!rity re$ers to the persona code o$

ethica #eha+ior that each person adopts%

Anser: 2

1-2/F % White-coar crime is not used interchan!ea#y ith occupationa $raud

and economic crime%

Anser: F

1-2/F ;% For purposes o$ de$inin! occupationa $raud and a#use, empoyees incude

ony top or midde mana!ers%

Anser: F

1-2/F r!ani)ationa crimes occur hen entities, companies, corporations, not-

$or-pro$its, nonpro$its, and !o+ernment #odies, otherise e!itimate and a-

a#idin! or!ani)ations, are in+o+ed in a crimina o$$ense%

Anser: 2

1-2/F 1?% 2he eement o$ pro'imate cause $or ne!i!ence means the painti$$ must

esta#ish that dama!es resuted $rom the de$endant(s #reach o$ duty%

Anser: F

1-2/F 11% &n order to in an aard $or dama!es $or ne!i!ence, the in@ured party

must pro+e ia#iity and dama!es%

Anser: 2

1-2/F 14% 2he amount o$ dama!es pro+en under ne!i!ence may #e reati+ey

uncertain%

Anser: F

1-2/F 13% 2he nonsharea#e pro#ems, Cressey in+esti!ated, threatened the status o$

the su#@ects, or threatened to pre+ent them $rom achie+in! a hi!her status than the

one they occupied at the time o$ their +ioation%

Anser: 2

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1-2/F 16% ioations o$ ascri#ed o#i!ations ha+e historicay pro+ed to #e stron!

moti+ators o$ $inancia crimes%

Anser: 2

1-2/F 19% Percei+ed opportunity is necessary so that the perpetrator o$ a $raud can

mae his ie!a #eha+ior intei!i#e to him and maintain his concept o$ himse$

as a trusted person%

Anser: F

1-2/F 1% Cressey(s cassic $raud trian!e heps e'pain the nature o$ a occupationa

o$$enders%

Anser: F

1-2/F 1;% Accordin! to A#recht, opportunities to commit $raud may #e created #y

indi+iduas, or #y de$icient or missin! interna contros%Anser: 2

1-2/F 1


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)u(ti*(e C+oice

1-M/C 1% Based on a num#er o$ theories, peope o#ey as $or a o$ the $ooin!

reasons except:

A% 2he $ear o$ punishment

B% 2he desire for rewards

C% &n order to act in a just and moral manner according to

societys standards.

"% "ue to a duty to act

Anser: "

1-M/C 4% Portions o$ the &C> Act outa a o$ the $ooin! except:

A% in+estin! ie!a $unds in another #usiness%

B% acuisition o$ a #usiness throu!h ie!a acts%

C% a pri+ate or ci+i ron! or in@ury other than #reach o$ contract%"% the conduct o$ #usiness a$$airs ith $unds deri+ed $rom ie!a acts%

Anser: C

1-M/C 3% 2he e!a standard $or ne!i!ence has a o$ the $ooin! eements except:

A% ire $raud

B% duty%

C% #reach%

"% cause in $act%

Anser: A

1-M/C 6% Which o$ the $ooin! is notone o$ the $our common eements o$

occupationa $raud and a#use $irst identi$ied #y the Association o$ Certi$ied Fraud

E'aminers in 1==D

A% 2he acti+ity costs the empoyin! or!ani)ation assets, re+enues, or

reser+es%

B% 2he acti+ity +ioates the empoyee(s $iduciary duties to the or!ani)ation%

C% 2he acti+ity is candestine%

"% 2he acti+ity is restricted to corporate e'ecuti+es%

Anser: "

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1-M/C 9% &n terms o$ the de$inition o$ occupationa $raud and a#use, ho is an

empoyeeD

A% Any person ho recei+es re!uar and periodic compensation $rom an

or!ani)ation $or his or her a#or%

B% >ny ran and $ie orers%

C% Any trust +ioator%

"% especta#e #usiness and pro$essiona men%

Anser: A

1-M/C % tatus !ainin! is most typicay associated ith hich o$ the $ooin!D

A% percei+ed economic pay ineuities%

B% no one to share a pro#em ith%

C% re+en!e $or un$air treatment in the orpace%

"% 7eepin! up ith the Joneses8 syndrome%

Anser: "

1-M/C ;% A o$ the $ooin! are characteristics o$ a#sconders except:

A% o occupationa and socioeconomic status

B% typicay sin!e or separated $rom their spouse%

C% $e !roup associations%

"% ha+e stron! socia ties%

Anser: "

1-M/C


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1-M/C =% Which principe o$ ethica pro#ems as championed #y John tuart

MisD

A% 2he *enerai)ation Principe%

B% 2he tiitarian Principe%

C% 2he &mperati+e Principe%

"% 2he esponsi#iity Principe%

Anser: B

1-M/C 1?% eect the most correct statement $rom those #eo re!ardin! the

e!a standards $or ne!i!ence%

A% Breacha determination that the defendant failed to useordinary or reasonable care in the exercise of that duty%B% easona#enessa determination that the defendant failed to

use ordinary or reasonable care in the exercise of that

duty%

C% Breachan actual connection between the defendantsbreach of duty and the plaintis harm can beestablished

"% Cause in Fact G the defendant must have been the proximatecause or contributed to the injury to the plainti.Anser: A

1-M/C 11% Accordin! to Cressey, a trust +ioator is #est descri#ed as

A% $ictious coatera%

B% an em#e))er%

C% one ho is iin! to sette $or o status%

"% a satis$ied empoyee%

Anser: B

1-M/C 14% .oin!er and Car $ound that the same inds o$ empoyees ho

en!a!e in orpace de+iance aso en!a!e in empoyee the$t% Accordin! to their

research, hich o$ the $ooin! is not a characteristic e+idence o$ the empoyee-

thie$D

A% arri+es eary at or%

B% taes on! co$$ee #reas%C% a#uses sic ea+e poicy%

"% has so ormanship%

Anser: A

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1-M/C 13% Common +ioations pertainin! to occupationa $raud and a#use

incude a o$ the $ooin! except:

A% asset misappropriation%

B% pilferage%

C% false overtime%

"% A o$ these are common +ioations%

Anser: "

1-M/C 16% 2he term 7hite coar crime8 as coined #y:

A% "onad Cressey%

B% te+e A#recht%

C% 2he Association $or Certi$ied Fraud E'aminers%

"% Edin utherand%

Anser: "

1-M/C 19% e!ardin! crimes ie $raud, do Federal law allows

organiations to be prosecuted in a manner similar to

individuals!

A% 5o%

B% Hes%

C% 5o, #ut internationa a does%

"% >ny i$ they are the party ith the deep pocets in the case%

Anser: B

1-M/C 1% 2he pendin! asuits in the notes to the $inancia statements o$ 1?-

Ks o$ most corporations are most iey a o$ the $ooin! except:

A% anti"trust actions%

B% intellectual property infringements%

C% ta' caims%

"% &C> acti+ities%

Anser: "

1-M/C 1;% &C> typicay addresses hich o$ the $ooin! acti+itiesD

A% en+ironmenta issues

B% wor#place issues such as lost wages$ disability$ and

wrongful death%

C% costs and lost pro%ts associated with construction delays%

"% money laundering%

Anser: "

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1-M/C 1peratin! on a crisis #asis

"% Worin! ith mana!ement to set reaistic !oas

Anser: "

1-M/C 44% aria#es $rom A#recht(s study o$ 7red $a!8 +aria#es pertainin!

to occupationa $raud $e into hich o$ the $ooin! to cate!oriesDA% perpetrator characteristics and or!ani)ationa en+ironment%

B% socioeconomic !roup and education%

C% moti+ation characteristics and education%

"% attitudes and ha#its%

Anser: A

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1-M/C 43% Accordin! to .oin!er and Car(s research, hich o$ the

$ooin! are east iey to en!a!e in ie!a #eha+ior in the orpaceD

A% youn!er orers%

B% oder orers%

C% empoyees that $ee they are e'poited%

"% dissatis$ied orers%

Anser: B

1-M/C 46% e!ardin! the$t, &ollinger and 'lar# were able to con%rm

a direct relationship between(

A% computeri)ed in+entory contro and sic ea+e poicy%

B% an empoyee(s position and the e+e o$ the$t%

C% oer e+es o$ income and hi!her e+es o$ the$t%

"% 5one o$ these ere con$irmed as a direct reationship%

Anser: B

1-M/C 49% With respect to security controls$ &ollinger and 'lar#

discovered that most employees regarded these measures to be

A% tar!eted toard e'terna security%

B% tar!eted toard interna security%

C% part o$ increasin! morae%

"% part o$ or!ani)ationa trust communication%

Anser: A

1-M/C 4% Which o$ the $ooin! is a si!ni$icant concusion #ased on the

research o$ .oin!er and CarD

A% su#stantiay increasin! the internal security presence mayreduce employee theft.

B% tightening controls over property deviance may create lessdetrimental acts aecting the productivity of theorganiation%

C% special attention should be aorded to older employees$

since they have lower levels of %nancial authority and are

more li#ely to steal for their retirement %"% increased management sensitivity to its employees wouldreduce all forms

of wor#place deviance.

Anser: "

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1-M/C 4;% Which o$ the $ooin! oud #e cassi$ied as a #usiness re+ersa

that eads to the perception o$ non-sharea#e $inancia pro#emsD

A% pro#ems arisin! $rom in$ation%

B% pro#ems arisin! $rom hi!h interest rates%

C% pro#ems arisin! $rom economic donturns%

"% pro#ems arisin! $rom ha+in! no one to turn to%

Anser: "

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1-M/C 31% ationai)ations o$ on!-term +ioators in Cressey(s study incuded

a o$ the $ooin! except:

A% they were embeling to #eep their families from shame$disgrace$ or poverty.

B% they ere em#e))in! #ecause theirs as a case o$ necessity%

C% their co-orers encoura!ed them to do it%"% they ere em#e))in! #ecause their empoyers ere dishonest and needed

to #e $eeced%

Anser: C

1-M/C 34% Cressey(s con@uncture o$ e+ents #asicay says that a three

eements must #e present $or the trust +ioation to occur% 2hese e+ents are:

A% no $raud pre+ention pro!ram is a+aia#e, the o$$ender acs a conscience,

empoyees are $riends ith customers%

B% percei+ed non-sharea#e $inancia pro#em, percei+ed opportunity, and the

a#iity to rationai)e%

C% the perpetrator is not married, is a mae, and needs to #uy a car or other

ar!e asset%

"% there are no itnesses to the crime, the indi+idua has a stron! chaen!e to

#eat the system, and the indi+idua has a !am#in! pro#em%

Anser: B

1-M/C 33% A#recht de+eoped the $raud scae hich incudes the $ooin!

components:

A% situationa pressures, percei+ed opportunity, and persona inte!rity%B% hi!h persona de#t, i+in! #eyond one(s means, dru! or acoho pro#ems%

C% situationa pressures, persona inte!rity, and crimina record%

"% 5one o$ the a#o+e are the components $or the $raud scae%

Anser: A

1-M/C 36% Iar!e $raud perpetrators are more iey to use the money $or a o$

the $ooin! except:

A% to purchase new homes%

B% to pay $or e'pensi+e +acations%C% to support e'tramarita a$$airs%

"% to pay ta'es%

Anser: "

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1-M/C 39% Which is considered the oest threshod $or ethica decision

main!D

A% A pro$essiona code o$ ethics o$ an accountin! or!ani)ation%

B% Codes o$ conduct or directi+es a#out hat is #est $or society%

C% 2he a%

"% Codes o$ conduct !uided #y trust in the underyin! +aues that !uide

society%

Anser: C

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S+ort Ans,er Ess'

1-AE 1% 2he de$inition o$ ethics has certain ey eements% What are these $our ey

eementsD

Anser: 1. Ethics in+o+es uestions reuirin! re$ecti+e choice and their conseuences to

the indi+idua and others decision pro#ems0%

2. Ethics considers the rues and re!uations that are in pace to !uide #eha+ior as

e as the conseuences $or #reain! those rues and re!uations%

3. Ethics o$ten reies on mora principes to !uide choices o$ ri!ht and ron!%

2hese ethica $rameors are discussed in more detai #eo0%

4. Ethics is concerned ith outcomes, the assi!ned impact associated ith main!

a decision here the impact re$ects the underyin! +aues o$ indi+iduas and

or!ani)ations% 2e't pa!e ;0

1-AE 4% Can a a permit an action that is prohi#ited #y a pro$ession(s code o$

ethicsD "iscuss and !i+e an e'ampe%Anser: *t may happen that a law might permit an action that is

prohibited by a professions code of ethics. )s an

example$ for years the )merican *nstitute of 'erti%ed Public

)ccountants +)*'P), had rules of ethics that prohibited

advertising by its members. -he profession believed that dignity and

objectivity were enhanced by #eeping practitioners out of this

aspect of the commercial world. -he ./. Federal -rade

'ommission and the ./. 0epartment of 1ustice$ however$

disagreed. -hey decided that the prohibitions against advertising

violated the laws barring restraint of trade. -he government

forced the profession

to eliminate its rules against advertising. -his example illustrates

the triumph of one set of values +the governments belief that

competition through advertising would bene%t consumers,

over another set +the professions belief that dignity should be

preserved,. +-ext page 22,

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1-AE 3% 2hree ethica principes pro+ide a $rameor $or ethica decision main!%

What are theyD Brie$y summari)e their assumptions%

Anser: 2he three ethica principes that pro+ide a $rameor $or ethica decision main!

incude: 10 the imperati+e principe 40 the utiitarian principe and 30 the

!enerai)ation principe%

2he imperati+e principe ignores outcomes by providing directives andrules without exception that are in the best interest of society asa whole.-his unconditional obligation assumes that allpeople are aware of the rule and all agree to follow the rule.2he Kantian imperati+e is +ery strict #ut provides an easy to understandframewor# for ethical decision ma#ing. *t is$ however$ almost

impossible to follow all of the time$ in practice$ when a person is facedwith violating an imperative$ but it alerts persons that they are

faced with an ethicalproblem where they must see# out additional considerationfor weighing the

conse3uences.

-he utilitarian principle suggests that ethical problems should besolved by weighing the good conse3uences and the badconse3uences. -he correct course of action is that which providesthe most good or minimies the bad. -here are two forms ofutilitarianism. -hey are 4act5 and 4rule.5 )ct utilitarianism suggests that

it is the conse3uences of the act that matter. 6ule utilitarianism

emphasies the bene%ts to society of general rules +similar to a7antian imperative, and suggests that the decision to brea# arule is one that re3uires very careful consideration. 6uleutilitarianism re3uires that society as a whole be able to determine which

rules are important and ought to be followed. 6ules thenare also in8uenced by history$ nationality$ culture$ social goals$and at some level economics. &owever$ it is di9cult foreveryone to agree on universal principles.

-he generaliation principle is an attempt to marry imperativeswith utilitarianism. *f the outcome is considered

undesirable$ then that conduct ought to be avoided unless the personhas a very good reason. :eneraliation provides the 8exibilityneeded to address the shortcomings of 7ant and the speci%c direction

that seems to be missing from utilitarianism.2e't pa!e ;;0

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1-AE 6% 2o #e success$u in any speciai)ed $ied ie $orensic accountin! or $raud

e'amination, pro$essionas must ha+e characteristics that set them apart as a

pro$ession% What are these $i+e characteristicsD

Anser: 1. ) specialied body of #nowledge.

2. )dmission governed by standards and 3uali%cations.

3. 6ecognition and acceptance by society +a characteristic that

in8icts social responsibility bac# on the profession,.

4. /tandards of conduct for dealing with the public$ other

professionals$ and clients.

5. )n organiational body devoted to the advancement and

responsibilities of the profession. +-ext page 2;,

1-AE 9% What is tone at the top and hy is it an important part o$ ethica #eha+ior

in an or!ani)ationDAnser:


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/econd$ the organiation should be committed to hiring honest

executives$ managers$ and sta. =hile most organiations

attempt to contact prior employers and resume references$

many organiations provide only minimal information about

former employees and are remiss to provide any negative feedbac# for fear

of legal retribution. 6eferences provided by prospective

employees are typically friends and professional

ac3uaintances> so prospective employers should see# out prior

supervisors. =hile costly$ organiations should consider bac#ground chec#s

on prospective employees. 0ue to cost constraints$

organiations may want to restrict the positions for which

bac#ground chec#s are completed. -o avoid charges of

discrimination$ prospective employers need to complete such chec#s in

a consistent manner and in compliance with corporate policy.

Finally$ once employees are hired$ they need to be supervised

and trained with controls and ethical behavior in mind. +-ext

page ?@,

A"/)< C. =hat is the %ve"step approach to fraud prevention$ deterrence$

and detection!

)nswer( 1. 7now the exposures +brainstorming$ ris# assessment$ audit

planning,

2.-ranslate exposure into li#ely symptoms

3. )lways be on the loo#out for symptoms

4. Build audit and data"mining programs to loo# for symptoms

5. Pursue these issues to their logical conclusion and ground

decisions in the evidence +evidence"based decision"ma#ing,

Critic'( T+in/ing E0ercise

2hree peope chec into a hote% 2hey pay 3? to the mana!er and !o to their room% 2he mana!er

suddeny remem#ers that the room rate is 49 and !i+es 9 to the #e#oy to return to the peope%>n the ay to the room, the #e#oy reasons that 9 oud #e di$$icut to share amon! three

peope so he pocets 4 and !i+es 1 to each person% 5o each person paid 1? and !ot #ac 1%

o they paid = each, totain! 4;% 2he #e#oy has 4, totain! 4=% Where is the missin! 1DL

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Anser: Be care$u o$ hat you are addin! to!ether% >ri!inay, they paid 3?, they

each recei+ed #ac 1, thus they no ha+e ony paid 4;% >$ this 4;, 49

ent to the mana!er $or the room and 4 ent to the #e#oy%

Te0t Reie, uestions

4-2 1% "escri#e occupationa $raud and a#use%

Anser: Occupational fraud and abuse is de%ned as 4the use of ones

occupation for personal enrichment through the deliberate

misuse or misapplication of the employing organiations

resources or assets.5 Dccupational fraud and abuse involves a

wide variety of conduct by executives$ employees$ managers$ and

principals of organiations$ ranging from sophisticated

investment swindles topetty theft. 'ommon violations include asset misappropriation$

fraudulent statements$ corruption$ pilferage$ petty theft$

false overtime$ using company property for personal bene%t$

%ctitious payroll$ and sic# time abuses.

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4-2 4% Compare and contrast Cressey(s and A#recht(s theories o$ crime

causation%

Anser: Athou!h Cressey $ocused on em#e))ement and A#recht $ocused on

occupationa $rauds, their eements ere +ery simiar% Accordin! to

A#recht, three elements must be present for a fraud to be

committed( a situational pressure$ a perceived opportunity to commit

and conceal the dishonest act$ and some way to rationalie

+verbalie, the act as either being inconsistent with ones personal

level of integrity or justi%able. )ccording to 'ressey$ the three

elements are perceived pressure or a nonshareable %nancial

pressure$ a way to secretly resolve the dishonest act or the lac#

of deterrence by management via a perceived

opportunity$ and %nally some way to rationalie the act$ because the

perpetrator does not see him or herself as a criminal.

4-2 3% &denti$y $rom Cressey(s research the si' situationa cate!ories that cause

non-sharea#e pro#ems%

Anser: 'ressey found that the nonshareable problems encountered by

the people

he interviewed arose from situations that could be divided into

six basic categories(

E violation of ascribed obligations

E problems resulting from personal failure

E business reversals

E physical isolation

E status gaining

E employer"employee relations

4-2 6% "iscuss the essence o$ or!ani)ationa crime%

Anser: Organizational crimes occur when entities$ companies$

corporations$ not"for" pro%ts$ nonpro%ts$ and government

bodies$ otherwise legitimate and law"abiding organiations$ are

involved in a criminal oense. *n addition$ individual

organiations can be trust violators when the illegal activities of theorganiation are reviewed and approved by persons with

high standing in an organiation such as board members$

executives$ and managers. Federal law allows organiations to

be prosecuted in a manner similar to individuals. For example$

although the )rthur )ndersen conviction was later

overturned by the ./. /upreme 'ourt$ the organiation was

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convicted of obstruction of justice$ a felony oense that

prevented them from auditing public companies. 'orporate violations

may include administrative breaches$ such as noncompliance

with agency$ regulatory$ and court re3uirements>

environmental infringements> fraud and %nancial crimes$ such

as bribery and illegal #ic#bac#s> labor abuses> manufacturing infractions

related to public safety and health> and unfair trade

practices.

4-2 9% *i+e e'ampes o$ #eha+iora indications o$ $raud%

Anser: Beha+iora symptoms o$ $raud can incude such #eha+ior as:

'ant loo# people in the eye

the employees position only aects

the method and amount of the theft after the decision to steal

has already been made.

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4-2 ;% Anay)e the roe o$ corporate !o+ernance mechanisms in $raud pre+ention%

Anser:


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EnronNs B>" re+ieed and appro+ed creation o$ PEs and assi!ned Audit

Committee duty to re+ie transactions% B>" ai+ed company(s code o$ ethics

$or PE transactions% Audit Committee $aied to adeuatey understand, re+ie,

and monitor PEs and EnronNs accountin! and reportin! practices%

4-2 =% &denti$y ethica issues, con$icts o$ interest, and noncompiance ith

corporate poicies and procedures in the Enron case%

Anser: Enron had a code o$ ethics that prohi#ited mana!ers and e'ecuti+es $rom #ein!

in+o+ed in another #usiness entity that did #usiness ith their on company% But

these codes o$ ethics ere +ountary and ere essentiay set aside #y the #oard o$

directors% 2he e!a structure aoed mana!ers to enter these arran!ements,

hich constituted a con$ict o$ interest and hie the mana!ers and e'ecuti+es had

a $iduciary duty to act in the #est interest o$ the company and its sharehoders,

there as considera#e discretion $or them to e'ercise their on #usiness@ud!ment a#out hat as in the #est interest o$ the company% By succum#in! to

!reed and dishonesty #y secrety e'ercisin! stoc options and $asey reportin! the

per$ormance reaity o$ the $irm to other staehoders, top Enron mana!ers

a#andoned the #asic standards o$ inte!rity and created a noncompiance reaity

that as much di$$erent than *AAP or EC reportin! standards had e+er

ima!ined%

G"-6H A@. "iscuss aternati+e courses o$ action in the Enron case ithin the

$rameor o$ appropriate ethica conduct%

Anser: Alternative decisions may result in variations of good and badconse3uences. -herefore$ the tas# is a di9cult one and the

choice must be left to individuals. *t is impossible to provide

a blueprint for every situation with laws$ rules$ and exceptions.

-he bottom line is that civilied societies are based on trust with

underlying values and implicit codes of conduct that guide our

behavior. -he decision process is di9cult$ and the range of

possible outcomes suggests that the right choice is not

always obvious. -hough doing the right thing can be di9cult$

as members of society$ we have a responsibility to reach for that goalevery day$ without exception.

*n practice$ fraud and forensic professionals can start with rules$

laws$ and 7antian imperatives to identify ethical

situations +ethical dilemmas, that re3uire more in"depth

evaluation. Dnce the ethical problems have been identi%ed$ the

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evaluation process begins and professionals can use their own

framewor#

for ethical problem solving$ including using personal rules and

processes for decision ma#ing. -he fraud and forensic

professional is not alone and should solicit the input and

opinions of other practicing professionals. *n some cases$

guidance and advice from professional organiations and associations

can assist

the individual in ma#ing the best decision. )fter careful

consideration of the alternative outcomes and the decision is

made$ the professional can then move forward to implement

that decision. -his process will help to ensure that the

anticipated goals are realied while also attempting to mitigate any

negative conse3uences.

Documents

Chapter 3 Test for Forensic Accounting & Fraud Examination, 1 e Mary-Jo Kranacher ISBN-10; 047043774X Wiley 2010