Mary Larson,the Director of Public Relations for St

question 72

Essay

Mary Larson,the director of public relations for St.John's Hospital,is preparing a news release related to the yearly audit.Mary notes that net income has increased by 20 percent and wants to highlight this increase as a measure of the hospital's success in controlling costs.Daren Anderson,the controller,knows that the increase in net income is related to a company decision to reduce the bad debt estimate related to uncollectible patient accounts and is unrelated to cost-control measures.Daren explains the increase to Mary,but she replies: "Readers of the news release will not take the time to review the annual report,so we can tell them that earnings have increased due to efficiency measures on our part and they will think we are trying to save them money.It is more interesting to say that our earnings have increased due to cost-control measures,rather than to say that we changed our method of estimating bad debts for patient accounts to generate the increase.Besides,it's my job to make the hospital look good."
Based on the information in the case,answer the following questions:
a.Identify the type of fraud that Mary and Daren are contemplating in this case.Explain your answer.Who is harmed by the fraud?
b.Give your opinion on the following statement,citing reasons for your opinion: "Because Mary Larson,the director of public relations,is most directly responsible for the media release,Daren Anderson,the accountant,has no real responsibility in this matter."

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Definitions:

Social Networks

Platforms or structures that connect individuals and organizations, facilitating communication and interaction.

Personal Troubles

Individual challenges and problems that are experienced by a person, often considered in the context of wider societal issues.

Social Issues

Problems faced by large numbers of people within a society, which often require intervention by public policy or social services.

Homelessness

A state of having no permanent residence, often resulting from a variety of social and economic factors.