Human Fraud Case Study

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 …show more content…
When dealing with ethical issues I believe that it is extremely important to communicate the issue and get it handled right away. It is my job as an employee to engage in positive ethical behavior, and to recognize any issues that may arise. In this particular situation, I would not make changes to the transaction I have correctly reported for the new policy effective January 6. I will immediately report my manager’s ethic violation to my human resources manager, and will continue to engage in ethical decision making. Again, I would choose to handle the ethical issue in this manner, for it is my duty as an employee of the insurance company to abide by ethical practices. I value my work and take pride in conforming to accepted principles of right and wrong in the workplace. Lastly, I believe it would be extremely valuable for the company to consider enhanced ethics training to prevent such issues from occurring in the work environment. I feel that this type of training is necessary in order to create an ethical company culture. Mike was going through a rough patch in his life that lead him to make an unethical decision, with the help of ethics training, issues like this can be