Case 2-9
1. The blame for the fraud should mostly go to Mouns. Mouns took advantage from the company and using company’s assets to get his personal profits. When Finn told him that the company is losing money, Mouns replaced the lost by putting a highter number on it made it looks like they were making profit. He was also convinced his Finn commit the crime with him. What Mouns did at first was to put pressure on supplier and got lower prices, and then the company started having profits. Finn was looking at the whole thing and thought Mouns would take care everything and makes everything be ok, so he followed Mouns’s method and went along with the fraud. Shapira also went along with Mouns’s decision and chose to trust him that he could fix everything without be noticed. I don’t think this fraud should all blame Mouns. Mouns was the starter of this fraud and the joining of Finn and Shapira encouraged Mouns’s crime and made him more and more greedy. Finn and Shapira’s went along with the crime without convince Mouns should do the right thing pushed the fraud went further. In this case, Coopers & Lybrand did not respect its professional judgment. It helped the fraud by telling Phar-Mor in advance that which store would be inventory observed and left enough time for stores to cover up the fraud.
2. According to the Rest’s Moral Model, Cherelstein will force Mouns stopped the fraud and let him pay back the money that he stole from the company. From the Rest’s Moral Modal, the first step of moral behavior is requiring people understand the situation in moral no matter there is people watching or not. In this case, when Cherelstein knew the fraud that Mouns committed, he did not happy at all. He wanted to meet Mouns and talks to him make him stop. The second part is moral judgment. Moral judgment means when a person knows how people may get affected by the alternatives, choice must be made based on which action is suit better on moral. Cherelstein knew the company has two books was wrong and he gave Mouns a chance to let him repay the company by using his personal assets.