Xecutives at Big Book Inc. had uncovered an internal problem involving embezzlement in the royalty department. In having to decide whether to go to the police or handle the problem themselves, they were faced with the possibility of a(n) .

ethical lapse

Explanation:

Ethical lapse -

It refers to an error during the process of judgement , in which the outcome of the result is not favourable or harmful , is referred to as ethical lapse .

An ethical lapse can be some on minor scale or in major scale , where the issue can be prefered to be private or publicized , depending on the issue to be legal or illegal .

Hence , from the given scenario of the question ,

The correct answer is ethical lapse .