Question
Thomas an accountant with World-Insurers Ltd (WIL) is the Data Processing Manager. Senior members of the management team have shares in WIL. Thomas does not
Thomas an accountant with World-Insurers Ltd (WIL) is the Data Processing Manager. Senior members of the management team have shares in WIL. Thomas does not have any shares. Three senior managers including Lightfoot, Thomas' boss, devise a strategy by which they will increase policy sales by incorporating bogus policies into the data file. The financial statements will improve, and the price of the shares will increase thereby increasing their holdings of WIL's shares. Essential to the scam is the cooperation of Thomas who is required to enter the bogus policy information and give them a special code. Thomas does not know the real reason for the "specially coded" policies, and he complies. The scheme works. When the auditor randomly selects a sample of new policies to be examined, the three fraudsters know from the special code that those policies do not exist. After business hours, they "manufacture" those included in the auditor's list and the next morning the auditor is given all policy documentation on his list. This went on for two years and in year three Thomas found out that unknowingly he has been party to this fraud. Lightfoot made it quite clear that he should continue to play his part and he would also benefit, or he would be fired.
Discuss the issues, the ethical principles and what you think Thomas should do.
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