You have recently graduated from college with an MBA. Upon graduation, you start working for Roosevelt Power Plant. The boss, Mr. Jones, invites you into his office. Mr. Jones describes to you a large fraud that has recently taken place in the company. He asks you what actions should be taken to ensure that fraud does not occur again. After analyzing the company, you compile a list of actions that will be needed to prevent fraud from occurring again. Upon presenting the necessary steps and controls to be taken, Mr. Jones notices your suggestion:
“Create a culture of honesty and create a positive work environment for employees.” Mr. Jones is enraged and wants to know what a positive work environment has to do with the prevention and detection of fraud.
1. What would you tell Mr. Jones about why a positive work environment will help prevent fraud?
2. What factors would you tell Mr. Jones contribute to a negative work environment?