You Decide: Which is more important-having a good system of internal controls or hiring honest employees?
Response to the following problem:
Is an internal control structure really necessary?
Your uncle doesn't seem to think so. He works for a regional employment staffing service and recently commented, "As long as a company hires hard-working, honest people, fraud and abusive financial reporting cases will be almost nonexistent. People with integrity will always make the right choice. In the last six months, we haven't placed anyone for employment who has been fired or let go for fraudulent activity!" A friend argues, however, that anyone presented with the right pressures can commit fraud and that opportunities must be eliminated through an effective internal control structure. Who do you agree with?