Question

briefly describe how you think ethical standards apply to the business environment. Include in your answer a description of the fraud triangle and how you think the fraud triangle is related to both internal control and ethics. Include your thoughts about the importance of your role in the university’s control environment.

Answer 1

For any business to grow , it is very necessary the the ethical principles of the business are being followed and carried forward by the employees of the business.

A business standards are being set by people at higher positions at top management. Ans the employees are expected to follow those. This helps build a healthy business environment. This slso mdkes employees disciplined and sincere towards their work. So these standards help build a good culture and environment in business as well as leading to the growth and profit. So its very important that the employees understand the importance of ethical standards and they apply this to their work while working in the organization.

Fraud is an activity committed by someone because of any reason that can provide someone personal gains. This can be done by anyone in the organization.

Fraud triangle gives a framework regarding why one would commit fraud in any organization, the factors giving rise to fraud being committed.

There are 3 components of thus fraud triangle :

• Opportunities - This represents the chances or circumstances created in a business which makes it possible to commit a fraud. This may be possible because of improper internal controls, or may be because not adequate finacial or accpunting policies, or also it's because of rules framed by top management is not very proper or any unethical behaviour shown btbtop management itself.

So, all these circumstances give an employee a chance that he could indulge in a fraud. In such case, a company have all the rights to control this if can bring improvements wherever required.

• Incentives: This also refers to the pressure under which one gommit fraud in any organization. This basically related to z the profit one can see if he commits fraud.

Now a days comoanies are expecting too much profit. So an accountant can show wrong figures of oeofir so that company would give them bonus for the accounting year. Or they may find that doing fraud, is adding money to their personal account or for their own, so they indulge in doing fraud. These are the reasons why one think of doing fraud.

• Rationalization: This refers to the justification one person can make for doing fraud in the organization. Like one can say he was being created wrong, or he was not given proper care in the organization so he did commit the fraud.

So basically this is what ab employee has to say on behalf of his doing crime in the organization.

Now, if we see, we can understand that this fraud triangle is related to the internal controls as well as ethics. If the internal controls were proper, then the employees would not get the opportunity to do any type of fraud and thus, this fraud would have been eliminated fully.

Also, if the ethics and code of conducts are strictly followed and assured by top management that all employees are following that, then this fraud can have been reduced. Employees would have doing work ethically and this would result in reduced frausnin any organization.

Hence, it right to say that fraud triangle is related to internal controls and ethics.

My role in university's control environment is very crucial. As being a student, its my sole responsibility to follow the rules framed by the University to haintain a healthy environment in the university. And this culture is carried by the students and teachers itself to maintain this.

Hence, every student should try to abide by the rules and follow them to maintaing q working environment in the university and hence here we as a student play an important role.