22nd Annual ACFE Fraud Conference: Why We Take the Road to the Ethical Dark Side

Make the Right Choices to Avoid the 'Ethical Dark Side'

By Dick Carozza, Editor-in-Chief, Fraud Magazine

Your friend is the new executive assistant to the vice president of a medical services company. The company recently purchased 30 computers for its employees, and her boss asked her to install Microsoft Office suite on all of them. Over a coffee break, she mentions the project. You ask if the company obtained a licensing agreement from Microsoft for use on all the machines. Your friend tells you the company bought only one license for use on just one computer. She doesn't want to violate the law, but she wants to make her new boss happy. She said was just following orders.

How do you advise her? Tell her:

To call Microsoft and report the company.
That she should explain the situation to the boss and buy more licenses.
To get the license request from her boss in writing.
To report the boss on the company's anonymous whistleblower hotline.

This is one of several true situations that Deanna Sullivan, CFE, CPA, shared Monday during her breakout session, "Why We Take the Road to the Ethical Dark Side."

Sullivan gave a sample process for evaluating a situation to help prevent any of us from straying to the dark side:

State the problem.
Identify all pertinent facts.
Identify all stakeholders.
Brainstorm potential options/choices.
Select two to four of the most viable options and:

Choose the option with the best outcome/least harm for you and the participating stakeholders.

Ethics and Integrity

Sullivan defined ethics as a system of principles of right conduct and moral values, and rules or standards that govern the conduct of a person or members of a profession. "It's so hard to teach people ethics because life is not black and white," Sullivan said. "Just because something is legal doesn't mean it's ethical."

The three types of ethics are personal, professional and organizational (which includes the CFE Code of Ethics), she said.

Integrity, which is, in part, firm adherence to a code of moral values, involves:

A study of the right thing to do.
Consideration of the price you are willing to pay to do the right thing.

Every person, unfortunately, has a price, she said. Sullivan quoted Ivan Boesky, who, before he was convicted of Wall Street insider trading, advised a college graduating class, "Greed is all right. … You can be greedy and still feel good about yourself."

Though we might believe we inherently are persons of integrity, Sullivan said we should ask ourselves some probing questions when we are facing thorny ethical questions:

Is it legal?
Does it comply with my profession’s standards and code of ethics?
Does it comply with the organization’s policies and procedures, code of conduct and code of ethics?
Would I want my choice published in the paper the next day?
What would my mother say when she learned of my choice?
Could I defend my choice before a Congressional committee?
What would my peers (personal and professional) say?
Would I want the same choice made for myself? (The Golden Rule)
How does my choice make me feel?

When it comes to investigating fraud, Sullivan reminded CFEs that they need to be sympathetic to the people they are investigating. "Why don't people report unethical behavior? Retaliation," she said. "For employees, the challenge of being ethical is they often have to pay a price to stand up and do the right thing. As a CFE, CIA, CPA, we have an obligation to remember that and help these people."

The Association of Certified Fraud Examiners assumes sole copyright of any article published on www.fraudconference.com or www.ACFE.com. ACFE follows a policy of exclusive publication. Permission of the publisher is required before an article can be copied or reproduced.