Professional Issues in Information Technology

Questions and Answers

What ethical issues are commonly raised by information systems?

Issues include privacy concerns, data security, and the potential for misuse of information.

What principles can guide ethical decision-making in technology?

Principles include transparency, accountability, and fairness.

In what ways do contemporary information systems challenge individual privacy?

They collect vast amounts of personal data and can lead to unauthorized access or surveillance.

How have information systems affected everyday life?

They have transformed communication, access to information, and business operations. Signup and view all the answers

What was the outcome of the Enron scandal in regard to ethical business practices?

It exposed significant ethical failures and led to stricter regulations on corporate governance. Signup and view all the answers

What role did Sherron Watkins play in the Enron scandal?

She was a whistleblower whose testimony helped unveil the company's unethical practices. Signup and view all the answers

What are the consequences for individuals caught violating data protection laws?

Consequences can include criminal charges, fines, and imprisonment. Signup and view all the answers

What ethical lessons can be learned from the actions of Jeff Skillings and Ken Lay?

The importance of transparency and the dangers of prioritizing profit over ethical standards. Signup and view all the answers

What was the primary unethical practice that led to Enron's bankruptcy?

Enron used accounting loopholes to hide billions of dollars in bad debt while inflating earnings. Signup and view all the answers

How much did WorldCom inflate its assets in 2002?

$11 billion. Signup and view all the answers

What severe consequence did WorldCom's CEO Bernie Ebbers face for his role in the scandal?

He was sentenced to 25 years in prison. Signup and view all the answers

What major action did AIG's CEO Hank Greenberg take that resulted in accounting fraud?

He manipulated stock prices and booked loans as revenue. Signup and view all the answers

What was the amount of the fine AIG had to pay to the SEC?

$1.64 billion. Signup and view all the answers

During the 2008 financial crisis, what amount did Lehman Brothers disguise as loans?

$50 billion. Signup and view all the answers

What method did Lehman Brothers use to create the illusion of having more cash?

They sold toxic assets to banks on a short-term basis and planned to buy them back. Signup and view all the answers

How did the Enron scandal affect its share price?

The share price collapsed from around $90 to under $1. Signup and view all the answers

What was the impact of the WorldCom scandal on its employees?

It resulted in over 30,000 job losses. Signup and view all the answers

What did the SEC discover in their investigation of AIG?

They discovered massive accounting fraud amounting to almost $4 billion. Signup and view all the answers

Study Notes

Technology and Its Context

Ethical, social, and political issues arise from information systems, impacting individual privacy and intellectual property rights.
Contemporary information technology challenges traditional protections due to the rapid pace of digital advancements.

Investigative Case Example

Ramanayake Arachchige Don Pramod Dilupa Ramanayake, an assistant engineer at Epic Lanka Technologies, illegally accessed and deleted data from the National Medicines Regulatory Authority database.
On September 28, he was arrested and later released on bail of Rs.50,000, with additional sureties totalling Rs.1,000,000.
He must report monthly to the Criminal Investigations Department and is barred from leaving the country.

Enron Scandal (2001)

CEOs Jeff Skillings and Ken Lay concealed billions in debt, pressuring Arthur Andersen to overlook these financial discrepancies.
Sherron Watkins, a former employee, testified against the executives; Skillings received a 24-year prison sentence, while Lay died prior to serving time.
The scandal led to Enron's bankruptcy and Arthur Andersen's dissolution, with shareholders losing over $74 billion as stock prices plummeted from $90 to under $1.

WorldCom Scandal (2002)

WorldCom inflated its assets by nearly $11 billion following the Enron fallout, underreporting costs and inflating revenue through fraudulent accounting practices.
CEO Bernie Ebbers was sentenced to 25 years for fraud and conspiracy after an internal audit uncovered $3.8 billion in fraudulent accounts.
The scandal resulted in over 30,000 job losses and caused investor losses exceeding $180 billion.

AIG Scandal (2005)

AIG, a multinational insurance firm, faced a scandal involving CEO Hank Greenberg and a $4 billion accounting fraud, including stock price manipulation.
The SEC fined AIG $1.64 billion, and additional settlement payments included $115 million to a Louisiana pension fund and $725 million to Ohio pension funds.
The company coerced clients into using specific insurers and misreported loans as revenue.

Lehman Brothers Scandal (2008)

Lehman Brothers, a major investment bank, hid over $50 billion in loans disguised as asset sales, using accounting loopholes during the financial crisis.
The SEC investigation revealed the company sold toxic assets to offshore banks while planning to repurchase them, misleading investors about its liquidity.
This strategy created a false impression of financial health, highlighting significant ethical lapses in corporate governance.

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Description

This quiz explores the ethical, social, and legal issues associated with information systems. Students will examine guiding principles for ethical conduct and the challenges posed by technology to privacy and intellectual property. Enhance your understanding of how contemporary information systems impact society.