Case Studies of Ethics: Fraud

Case VI: Fraud

In previous cases, we have dealt with people acting in situations that were legal or, at worst, debatable. In this case, we consider outright fraud, which is illegal. However, the case really concerns the actions of people who are asked to do fraudulent things.

The Case

Alicia works as a programmer in a corporation. Ed, her supervisor, tells her to write a program to allow people to post entries directly to the company's accounting files ("the books"). Alicia knows that ordinarily programs that affect the books involve several steps, all of which have to balance. Alicia realizes that with the new program, it will be possible for one person to make changes to crucial amounts, and there will be no way to trace who made these changes, with what justification, or when.

Alicia raises these concerns to Ed, who tells her not to be concerned, that her job is simply to write the programs as he specifies. He says that he is aware of the potential misuse of these programs, but he justifies his request by noting that periodically a figure is mistakenly entered in the books and the company needs a way to correct the inaccurate figure.

Extensions

First, let us explore the options Alicia has. If Alicia writes this program, she might be an accomplice to fraud. If she complains to Ed's superior, Ed or the superior might reprimand or fire her as a troublemaker. If she refuses to write the program, Ed can clearly fire her for failing to carry out an assigned task. We do not even know that the program is desired for fraudulent purposes; Ed suggests an explanation that is not fraudulent.

She might write the program but insert extra code that creates a secret log of when the program was run, by whom, and what changes were made. This extra file could provide evidence of fraud, or it might cause trouble for Alicia if there is no fraud but Ed discovers the secret log.

At this point, here are some of the ethical issues involved.

           Is a programmer responsible for the programs he or she writes? Is a programmer responsible for the results of those programs? (In contemplating this question, suppose the program were to adjust dosage in a computer-controlled medical application, and Ed's request were for a way to override the program controls to cause a lethal dosage. Would Alicia then be responsible for the results of the program?)

           Is a programmer merely an employee who follows orders (assigned tasks) unthinkingly?

           What degree of personal risk (such as possible firing) is an employee obliged to accept for opposing an action he or she thinks is improper?

           Would a program to manipulate the books as described here ever be justified? If so, in what circumstances would it be justified?

           What kinds of controls can be placed on such programs to make them acceptable? What are some ways that a manager could legitimately ask an employee to write a program like this?

           Would the ethical issues in this situation be changed if Alicia designed and wrote this program herself?

Analysis

The act-deontologist would say that truth is good. Therefore, if Alicia thought the purpose of the program was to deceive, writing it would not be a good act. (If the purpose were for learning or to be able to admire beautiful code, then writing it might be justifiable.)

A more useful analysis is from the perspective of the utilitarian. To Alicia, writing the program brings possible harm for being an accomplice to fraud, with the gain of having cooperated with her manager. She has a possible item with which to blackmail Ed, but Ed might also turn on her and say the program was her idea. On balance, this option seems to have a strong negative slant.

By not writing the program her possible harm is being fired. However, she has a potential gain by being able to "blow the whistle" on Ed. This option does not seem to bring her much good, either. But fraudulent acts have negative consequences for the stockholders, the banks, and other innocent employees. Not writing the program brings only personal harm to Alicia, which is similar to the harm described earlier. Thus, it seems as if not writing the program is the more positive option.

There is another possibility. The program may not be for fraudulent purposes. If so, then there is no ethical conflict. Therefore, Alicia might try to determine whether Ed's motives are fraudulent.