Final answer:
To create a culture of honesty and confidentiality, it is not advisable to encourage employees to only report fraudulent activity to the CEO. Instead, a system should be in place to allow reporting to a designated team or department.
Step-by-step explanation:
In order to create a culture of honesty and confidentiality within a business, it is not advisable to encourage a person aware of fraudulent activity to only report to the CEO. Instead, a system should be in place that allows employees to report such activities to a designated team or department, such as an ethics hotline or an internal affairs unit. This helps to ensure that the information is properly investigated and appropriate action is taken. Encouraging employees to report any misconduct to a single individual can create opportunities for bias, conflicts of interest, and potential cover-ups.