How would you evaluate the internal controls of the company?

A vice president of marketing for your company has been charged with embezzling nearly $100,000 from the company. The vice president allegedly submitted fraudulent vendor invoices in order to receive payments. As the vice president of marketing for the company, the vice president is authorized to approve the payment of invoices submitted by third-party vendors who did work for the company. After the activities were uncovered, the company responded by stating: “All employees are accountable to our ethics guidelines and procedures. We do not tolerate violations of our ethics policy and will consistently enforce these policies and procedures.”

How would you evaluate the internal controls of the company?
Do you think there are companies that develop comprehensive ethics and compliance programs for mid- and lower-level employees and ignore upper-level executives and managers?
Is it an ethical issue if companies are not forthcoming concerning fraudulent activities of top executives in an effort to minimize negative publicity?

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