Forensics Business - Case Study Essay

707 Words Feb 6th, 2014 3 Pages
Fraud is bred in an environment that consists of low morals, lack of controls and accountability, and high pressure; this will result in a high fraud environment where fraud is most likely to occur. “A fish rots from the head down”, this is a common phrase used to define leaders of an organization or state who is the root cause of a mishap, or in Caterpillar’s case, fraud. When fraud occurs, the top management is also responsible for it indirectly; one of the most widely used measures to prevent fraud is by cultivating a culture that encompasses morality, acceptance and assistance. The three factors in creating a low-fraud environment are; hiring honest people and providing fraud awareness training; creating a positive work environment; …show more content…
To achieve a positive work environment, three aspects must be fulfilled: 1. Creating expectations about honesty through having a good corporate code of conduct and conveying those expectations throughout the organization 2. Having open-door or easy access policies 3. Having positive personnel and operating procedures
Aspect one talks about setting and channeling expectations from top management to all other employees. The Pygmalion Effect is a phenomenon founded by Professor Sterling Livingston, and his thesis was: “People generally perform according to a leader’s expectations. If expectations are low, actual performance is likely to be ‘substandard’. If, however, expectations are high, performance is usually high as well.” He also discovered that expectations must be actual and real, as humans are able to detect true or false expectations; hence it is important for top management to express genuine expectations to subordinates so as to achieve higher proficiency. In additional, implementation of codes of conduct, such as, Sarbanes-Oxley Act of 2002, SEC-Code of Conduct for all employees, and Hormel Foods Code of Conduct. These are signed and adhered to by all employees, so that certain boundaries and ethics are not jeopardized. To enforce the codes of conduct, it must be noticeable and conveyed frequently.
The second aspect elaborates on having an open-door policy; this

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