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Conflict Of Interest In Tyco

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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 “financial gimmicky” to …show more content…

These individuals 17 had the opportunity to swindle millions from the company and they took full advantage of that for several years before being stopped. These were the top executives at Tyco so although others knew what was going on, they did not come forward and stand up against the executives committing fraud. The internal controls in place were not enough to stop the fraud from occurring and because the tone from the top within the organization was that behaviour of that type was okay, others did not come forward to stop it either. The rationalization used by the perpetrators could have been that they worked hard for the company and therefore deserved the extra compensation. Also, they may have thought they would eventually pay it back. Overall though, the main motivation in the scandal was

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