Questions on Defense

Questions on Defense
Name
Name of Institution
Name of Professor
Date of Submission
1 Explain how corruption and ethics is relevant to your essay
Corruption remains a central issue in corporate governance in the world today. It is through this ethically unwarranted activity that corporate have lost millions of dollars leading investors losing a great deal of investments. Stakeholders` such as employees` and suppliers` efforts to continue working with a corporate that is riddled with corruption almost always hit a snag and the overall effect is disastrous to the economy. Take for example a situation whereby supplier can no longer supply, this means that he or she can no longer pay his or her employees and can also no longer return taxes to build the nation. As a result of poor management of funds through non-ethical means such as corruption, the employee shall also have their source of income interrupted and no longer in the very sense be able to feed their families or provide basic needs altogether. The corporate riddled with corruption cases also leads itself into a ditch of public uncertainly and further financial crisis as later discussed in this essay (Griseri & Seppala, 2010).
It is important to look at how ethical issues affect the day-today running of corporate as the results are potentially disastrous when some of the basic business values are not adhered to. We are well aware that as a result of the high level of corruption greed, personal and business ethics go low because there is basically no proper mechanism that can check the downward spiral of the business as it moves from one low to another with the top management fighting to swindle shareholders and other stakeholders while at the same time not caring about employees welfare.
This shall in turn affect the overall confidence of people e.g. the general public, in the companies because they no longer view the business entity as performing ethically or using acceptable means to stay or run the business.
2 Lesson 3 of the course identifies several theories of fraud. Explain all of the theories and discuss which theories apply to understanding the fraud committed.
A number of theories have been put forward in an effort to understand why individuals or corporate end up committing fraudulent activities even with the full knowledge of the fact that the activity they are about to commit is illegal and punishable by the laws in many jurisdiction around the country and the world. In order to understand the frauds committed by corporate we shall delve into the following theories of fraud, one after the other (Dyck, Morse, & Zingales 2010).
* Differential Association Theory
This theory explains that the more a person is exposed to certain activities especially activities that are illegal or unethical in nature the higher the possibility of the person taking part in the same activities. Fraudulent activities are no exception to this theory as it is suggested. If a person is often exposed in a social environment where criminal activities, techniques and attitudes are often tolerated or easily gotten away with then the person can be motivated to take part in similar activities including fraud. The differential association theory makes the assumption that an individual can easily be swayed by the prevailing circumstances that they are predisposed to (Levin et al., 2012, October).
* Anomie Theory
The word "anomie" can be used to describe a society that is departing from the norms. In the event that a society experiences a period of instability the previously held morals and norms together with values could no longer be upheld and therefore not considered as viable they were previously or altogether become absent. As a result of this the society may turn to criminal activities such as fraud among others such as delinquency and suicide, hence the coining of the term "anomie theory".
* Strain Theory
In the society we live in today there are various activities that human beings undertake in order to achieve a goal or a number of set goals that they aim to reach at in their lives. However though, these aspirations can often be shuttered by various factors that can either be intrinsic or extrinsic with respect to an individual. You will find that some individuals will opt for other means to satisfy the need to earn more either as a way of protest or as, simply, a mean of profiteering from the loopholes present in the system. An individual may also protest the significance of the day-to-day governance in a county or organisation in the problem resolution and therefore opt to fraudulent activities due to the excessive straining that they seem to have gone through during their quest to achieve whatever they always want to achieve. This is what is termed as the stress theory.
* Labelling Theory
A label is something that is coined and assigned or attached to something else. In society similarly there are those people who are of more authority than others and may more often than not seek to label other individuals by certain terms that may be a direct reflection of their perceived behaviour. This can lead to the labelled individual behaving like the so coined label in the real sense. This theory asserts that if and individual in a high profile case is labelled in a particular manner that may seek to vindicate their actions then the results on other cases and the impact on society is potentially negative because several people may take part in the fraud cases despite the same according to Trompeter et al., (2013).
* Rational Choice Theory
This is probably one of the most contestable theories here. It suggests that all individuals often have rational motivations behind all their attitudes and the actions that they seek to pursue and that all they expect is benefits from the activities just like all other human beings. The theory asserts that profiteering from activities whether legal is second to human nature and that only people choose to decide when or not a particular activity can be termed as fraudulent or not which is not fair. Furthermore, if the rewards of a particular fraudulent activity far much overshadow the consequences or punishment then the fraudster can gladly opt for taking part in the crime because this shall compensate the risks the individual is predisposed to (Dyck, Morse, & Zingales 2010).
* Social Control Theory
According to this theory, all societies have a particular set of rules and regulations that come together with norms that are guidelines to the behaviour that someone is expected to socially portray. In the event that these norms are violated then the impacts can range from mild to adverse from say for example social exclusion to more severe punishment such as incarceration (Dyck, Morse, & Zingales 2010). You will find that an individual has strong family ties, good friends and believes in the upholding of these moral values and therefore stands at a good position to avoid any such temptations as opting to take part in crimes such as fraud. However, in the absence of these strong family ties, friends and willingness to uphold these social values, the theory suggests that it is possible for an individual or group of individual to take part in fraudulent activities. The social control theory pushes the idea that there are informal systems of control that also include social customs that play a central role in defining a person`s character - this ‘character" includes the willingness to take part in these activities based on the stre...