The Third Ethical Issue Of Tyco Case - 1695 Words

The third ethical issue in Tyco case that relate to conflict of interest is accounting fraud. Accounting fraud can be described as any act or attempt to manipulate the financial statement for financial gain. It can be one of the legal issues in this case because it consists of fraud which is unlawful in written law. The conflict of interest arises in this case because the auditors, accountants, and executives of Tyco International erode trust and their personal interest has greatly varied with the interest of shareholders and the stakeholders in Tyco. They tend to sacrifice the quality of financial reporting information for their personal interest. In this case, Tyco International failed to give true financial picture for several years. Dennis Kozlowski, Mark Swartz and Mark A. Belnick were those Tyco’s executives who committed fraud by charged with falsifying business record to conceal a great amount of loan without approval. Besides, it had been found out that Tyco engaged in â€Å"financial gimmicky† to deliberate and manipulating its earnings. Jerry Boggess, the president of Tyco Fire and Security is the one who involved in bookkeeping fraud that affected the earning per share in Tyco in this case. Besides, Dennis Kozlowski also indicted on tax evasion for avoiding just over $1 million in New York State and local sales tax (Andrew and Alex, 2002). In addition, Scalzo (Tyco’s former auditor) who audited Tyco s financials from the years 1997 until 2001, found that he failed toShow MoreRelatedThe Scandal Have Paid For Their Unethical Behavior Essay850 Words   |  4 Pagesconvicted on 22 counts of grand l arceny, falsifying business records, securities fraud and conspiracy, sentenced from eight and one-third years to twenty-five years in prison, and ordered by State Supreme Court Justice Michael Obus to pay a total of $134 million in restitution, in addition of $70 million and $35 million fines respectively (Associated Press, Ex-Tyco Executives†¦). Belnick, the former general counsel, shelled out $100,000 to settle charges with the U.S. Securities and Exchange CommissionRead MoreNestle Business Ethics1126 Words   |  5 Pagesformula in third world countries. This was a problem, because the baby formula needed to be mixed with boiled water due to the polluted water supply in such countries. 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