The Ethical Issue Of Human Fraud Essay

865 Words Oct 17th, 2015 4 Pages
The ethical issue presented in the scenario is human fraud. Human fraud, “involves incent by people to defeat internal controls, such as management override, for personal gain” (Wild, Shaw, & Chiappetta, 2105, p.333). The human fraud in which is presented by Mike Lynch, the manager of an upstate New York regional office for an insurance company, is by telling his accountant to deposit a premium check that was received December 31 from a new policy that covers a period beginning on January 6, and to change the way the transaction was initially recorded to credit a revenue account. He reassures them by stating, “Hey we have the money this year, so why not count the revenue this year?” (Libby, Libby, & Short, 2014). “Human fraud is driven by the triple-threat of fraud: Opportunity which refers to internal control deficiencies in the workplace, Pressure which refers to financial, family, society, and other stresses to succeed, and Rationalization in which refers to employees justifying fraudulent behavior.” (Wild, Shaw, & Chiappetta, 2105, p.334). Mr. Lynch has been driven to human fraud, for he has been under enormous pressure lately, stemming from two factors. These two factors are, a mounting personal debt due to a family member’s illness, and the region’s sales of new policies that are a factor in his overall bonus have dipped below normal quota for the first time in years, meaning he will not be receiving the bonus he depends on. Handling this situation can be a bit sticky…

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