Keys_Ch4 - design of the system as a matter of company...

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21. B 22. B 23. B 24. B 25. B 26. C 27. B 28. D 29. A 30. B 31. D 32. A 33. B 34. B 35. B 36. D 37. D 38. D 39. B 40. B 41. C 42. D 43. A 44. D 45. D 46. A 51. Ethics in Control Systems - 15 minutes Easy This case raises an ethical question concerning the design and operation of internal control systems. Mary worked in a traditional cash receipts system, one where she had access to remittance advices but not to the associated payments. Control over unauthorized inputs arises in the independent reconciliation of payments received to remittance advices which have been processed. We may assume that Mary was unaware of the design of the system, at least to the extent that she was unaware that she could not do what she did and get away with it. The question is whether this lack of knowledge on Mary's part contributed to her dishonesty. If she had been made aware of the
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Unformatted text preview: design of the system as a matter of company policy, perhaps she would have avoided this action and the subsequent problems and embarrassments which it created. If employees are unaware of controls, then the controls can only be corrective and not preventative in operation. As Mary's plight suggests, it is not clear that this type of company policy is ethically desirable. The risk is the feeling that if employees are aware of the operation of controls, then they might use this knowledge to circumvent these controls. The point is that one should address this question rather than ignore it completely....
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