You are the owner of a privately owned, moderate-sized company. The business was founded over 20 years ago and has experienced impressive growth and profitability. The only frustrating thing, however, is that you know the companys profits would be significantly higher if you could rid it of its problems with fraud. Your accountants estimate that the company has lost approximately 7 percent of its earnings to fraud over the past five years. The company has adequate controls in place, and you try to ensure that people dont override them. Since you are the owner, however, you often bypass some controls. You know that you arent out to rob the company, so you believe that the controls arent applicable to you. You try to keep a close eye on most aspects of the business, but with about 500 employees, its difficult to know about everything that is going on. Employees have been caught in fraudulent activities in the past, but you have never bothered prosecuting them. You wish to avoid the negative publicity that would result, and you see no valid reason to publicly humiliate former employees-their shame wont bring back the money they have stolen.

What are some steps that you would take to lower the amount of fraud that is occurring in this company?Use the five factors described in chapter 4 relating to creating a culture of honesty, openness, and assistance to explain your answer.