If you found out your company was doing something against the law, like fraud, what would you do?

SITUATIONAL INTERVIEW QUESTION

By Christophe Paka | April 15, 2025 | 4 min read

   

What Would You Do If You Found Out Your Company Was Committing Fraud? 🚀

Have you ever considered how your moral compass might be tested in the interview room? Imagine being asked, "If you found out your company was doing something against the law, like fraud, what would you do?" It’s a situational interview question that not only challenges your ethics but also examines your problem-solving abilities in the face of an ethical dilemma.


Introduction

In today’s competitive job market, interviewers are looking beyond your technical skills. They want to know if you can navigate murky ethical waters and make decisions that are both morally sound and legally compliant. This company fraud interview question is one of the most challenging behavioral interview questions you could face.

When an interviewer poses this ethical dilemma interview question, they’re inviting you to share your thought process about handling fraud at work. They want to know how you balance loyalty to your organization with your commitment to the law and ethical principles.

In this post, we’ll explore:

  • The context and variations of this question.
  • The purpose behind asking it.
  • How to structure your answer using the STAR method.
  • Examples of both good and bad responses.
  • Tips on handling ethical situations during job interviews.

If you’re a professional or a job seeker striving to demonstrate workplace ethics and legal compliance, read on! 💡


Understanding the Question

This situational interview question is designed to assess several factors:

  • Ethical Standards: It measures your commitment to doing what is right, even when it may conflict with company interests.
  • Problem-Solving Skills: The interviewer wants to see how you would navigate a complex situation without escalating conflict unnecessarily.
  • Awareness of Company Protocols: Your answer should reflect an understanding of how to follow proper procedures while still upholding your personal values.
  • Communication Skills: How you articulate your thoughts shows your ability to communicate clearly and professionally.

Variations of the Question

Interviews might present this scenario in different ways:

  • "What would you do if you discovered your team was involved in unethical practices?"
  • "How would you handle a situation where you observed a senior manager breaking company policy?"
  • "If you learned that your supervisor was engaged in illegal activities, how would you proceed?"

Despite the variations, the essence of the question remains: Can you uphold ethical standards while respecting the company's processes?


The Purpose Behind the Question

This intriguing question is more than a test of your knowledge of the law; it’s a window into your personal and professional values. Here's why interviewers ask such questions:

  • Testing Your Moral Compass: Are you likely to stand up for what’s right?
  • Evaluating Your Problem-Solving Approach: Do you jump to immediate confrontation, or do you handle the situation with thoughtful consideration?
  • Assessing Loyalty and Discretion: Can you protect the company’s reputation while ensuring that illegal activities are appropriately addressed?
  • Judge Professional Judgment: How do you prioritize company protocols versus immediate action?

These insights help interviewers determine whether you’ll be a good fit for their company's culture, values, and commitment to job interview ethics.


Crafting Your Answer Using the STAR Method

An effective way to answer this ethical dilemma interview question is by using the STAR method—Situation, Task, Action, and Result. Here’s how you might frame your response:

  1. Situation: Briefly describe a context where ethical dilemmas or similar issues could arise in the workplace.
  2. Task: Explain what you needed to accomplish, emphasizing the balance between ethical action and respecting company protocols.
  3. Action: Discuss the steps you would take, such as gathering evidence, discreetly reporting issues, and following the proper channels.
  4. Result: Describe the intended outcome, focusing on maintaining integrity and upholding the law.

By structuring your answer in this manner, you convey that you are methodical, responsible, and dedicated to ethical principles. 🎯


Examples of Good and Bad Responses

Good Response

Example Answer:
"If I discovered that my company was involved in illegal activities like fraud, my first step would be to gather all the necessary facts and documentation to confirm the issue. I believe in a responsible and systematic approach, so I would follow the company’s established protocols. This might involve discreetly discussing my concerns with a trusted supervisor or the designated compliance officer to ensure that the issue is investigated properly. I understand the gravity of such allegations and would be prepared to escalate the matter in accordance with both internal policies and legal requirements if necessary."

Why It Works:

  • Shows Responsibility: Indicates a deliberate approach by gathering facts.
  • Follows Protocols: Demonstrates respect for company processes and established guidelines.
  • Balances Ethics and Loyalty: Indicates a balanced approach by addressing possibilities of internal reporting.
  • Legal Compliance: Reflects an understanding of legal implications.

Bad Response

Example Answer:
"If I found out my company was doing something illegal, I would immediately confront the individuals involved and publicly expose them."

Why It Falls Short:

  • Impulsive Reaction: Shows a lack of careful consideration and proper process.
  • Risky Behavior: Could lead to legal ramifications or harm the company’s reputation.
  • Lacks Professionalism: Demonstrates a disregard for internal processes and policies.
  • Potential for Conflict: Could escalate the situation unnecessarily without giving the company a chance to rectify the issue.

Key Elements to Include in Your Response

When preparing your answer, remember to cover the following critical points:

  • Ethical Commitment: Emphasize your unwavering dedication to ethical conduct.
  • Legal Awareness: Show that you understand the legal implications of fraud and unethical behavior.
  • Respect for Processes: Highlight your commitment to following internal policies and channels.
  • Balanced Approach: Communicate that while you are a loyal employee, you prioritize moral responsibility.
  • Discretion and Professionalism: Stress the importance of handling sensitive issues with care and confidentiality.

Using bullet points can help you organize your thoughts:

  • Gather Evidence: Detail the importance of verifying facts before taking action.
  • Follow Company Protocol: Mention the role of HR, legal departments, or compliance officers.
  • Plan for Escalation: Include contingency plans if internal measures do not resolve the issue.
  • Maintain Confidentiality: Discuss the importance of discretion to safeguard all parties involved.
  • Legal Recourse: Acknowledge the possibility of involving external authorities if the company fails to address the issue properly.

Why Preparation Is Key for Answering Situational Interview Questions

Missteps in answering job interview situational scenarios can leave an impression that overshadows your technical expertise. Here are some interview tips for ethical decisions:

  • Practice Your Answer: Simulate the interview environment by practicing with friends or mentors.
  • Stay Informed: Be updated on recent laws and regulations about corporate fraud and ethical practices.
  • Know the Company’s Policy: If possible, research the company’s code of ethics, compliance policies, and previous handling of ethical issues.
  • Be Honest: Authenticity is key. If you have faced a similar situation before, share your experience candidly.
  • Keep It Professional: Even if your personal feelings are strong, emphasize a calm, rational, and professional tone.

Further Considerations for Job Seekers: Beyond the Interview Room

Understanding workplace ethics interview questions goes beyond just preparing an answer for the interview. This topic sheds light on your overall character and how you might behave in challenging workplace scenarios. Here’s what you need to remember:

  • Self-Reflection: Reflect on your own values and how they align with potential employers.
  • Company Culture: Determine whether the company you’re interviewing with values transparency and ethical behavior.
  • Long-Term Fit: Consider whether you’d be comfortable in an environment where such issues might arise.
  • Resilience: Demonstrate that you can handle complex ethical issues without compromising your integrity.

By thinking about these aspects, you're not only preparing for your interview but also aligning yourself with organizations that respect job interview ethics and share your commitment to high moral standards.


Addressing Concerns During the Interview

It’s natural to feel uneasy when tackling such challenging questions, especially when they involve legal compliance and ethical decision making. Here are some strategies to help you respond confidently:

  • Stay Calm: Remain composed even if the question catches you off guard. A deep breath and a moment to collect your thoughts can go a long way.
  • Acknowledge the Complexity: It’s acceptable to note that these scenarios are complex and require careful consideration.
  • Discuss Hypotheticals: Since you haven’t actually experienced a situation involving corporate fraud directly, use