Ethical Issues in AIS
Ethical Issues in Accounting Information Systems
This essay examines ethical issues in accounting information systems as presented in the case of DHB Industries. Now known as Point Blank Solutions, the company, which supplied body armor to the U.S. military and law enforcement agencies, was charged by the SEC on March 1, 2011 for engaging in "massive accounting fraud" (SEC, 2011). The agency filed separate charges against three of the company's former outside directors and audit committee members for their complicity in the fraud.
According to the SEC, DHB Industries engaged in "pervasive accounting and disclosure fraud through its senior officers" (2011), along with misappropriating company assets to the personal benefit of the company's former CEO. Their accounting and disclosure fraud resulted in the company's filing "materially false and misleading periodic reports to investors" (2011). The SEC charged that the company's senior management manipulated the company's reported gross profit, net income, and other key figures in its earnings releases and public filings between 2003 and 2005. Their fraudulent activities included overstating inventory values, failure to include appropriate charges for obsolete inventory, and falsifying journal entries (SEC, 2011).
The three outside directors facilitated the misconduct...
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4. Conclusions In the article Ethical Issues in Information Technology, author Richard T. DeGeorge points out the existence of five interrelated ethical issues: issues in the usage of technology in business, issues in the it business, issues related to the Internet, issues in e-business and issues affecting the social background. Each of the five categories presents several ramifications. The article has a general coverage, an informal writing and throughout its 24
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