Business Ethnic

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  • Topic: Enron, Jeffrey Skilling, Kenneth Lay
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  • Published : April 3, 2013
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Chapter 01
Business Ethics, the Changing Environment, and Stakeholder Management I. Exercise 01: “REAL- TIME ETHICAL DILEMMA”
a). Summary:
I am a staff associate at a major public accounting firm and graduated from college two years ago. And I am working on an audit for a small, non- profit religious publishing firm. After testing on the royalty payable system, I find out that my firm owes to authors the royalties of their publications for the past 5 years. And none of the authors ever received their royalty payments. After presenting this fact to my senior auditor, he suggests me to pass over this finding. I think the senior auditor is respone for this error because he perfomed the testing phase in all of these years just before his promotion. And he is frustrated with me. I don’t know what to do! Should I tell the truth? Or just silence to keep my career safe? b). Questions:

1. What would I do in this situation? Why? What are the risks of telling the truth for me? What are the benefits? Explain. In this situation, I would tell the truth, I want to show this errors of royalty contracts to the authors and the one who have a higher status of my company (CEO, chairman, etc). Because of these reasons: * I can’t betray my conscience.

* I think the autors deserve to know the truth, and they deserve to receive their royalty payments. * The senior auditor is respone to this situation, he just thinks about the firm’s profit so he hides the truth by making a miscalculation of the royalties before his promotion. * Thinking and acting ethically is very important nowaday, because I think somedays someone will find out the truth and the company will blame this false to me. The risks of telling the truth for me: I am just a small person in this firm, if I tell the truth, the senior auditor will write a bad review for my personel file and promotion review. He is a very popular employee, it will be a big bet for my future if I against him. That why everyone told me The ugly truth, it’s can set me free or set me free to be a unemployee. The benefits: I will be famous if I sovle this big case, my senior auditor will get a punishment for his false, the authors can receive what they deserve. I can avoid committing a crime, if the government or the authors find out this error, I will go to jail. This surely lead my future to a dark side, it’s not worth for hidding this error.

2. what is the “right” thing to do in this situation? What is the “smart” thing to do for your job and career? What is the difference, if there is one, between the “right” and “smart” thing to do in this situation? Explain. The “right” thing to do in this situation is telling the truth. The “smart” thing to do is telling the truth also. In my opinion, there’s no difference between the “right” and “smart” thing in this situation. According the business ethics, it’s the “right” thing to do, because acting legally and ethnically means saving billions of dollars each year in lawsuits, settlements and theft. It’s very important to build trust in business nowaday. Telling the truth is the “smart” thing also, because if I hide this error, I will commit a serious crime, someday, the government find out, I will be arrested. It’s not worth to go to jail because this mistake. 3. Explain what you would say to the senior auditor, your boss, in this situation if you decided to tell the truth as you know it. I will tell them that they’ll commit a serious crime if the government find out this miscalculation, because they ‘re violate the business ethics. This case is related to more people, not a person. Our firm will lose credibility to the authors, our client,… And it will make a big consequence (no more authors cooperate with us, waste money for lawsuit, losing our client’s trust,…), if this case is found out.

II. Exercise 02: Enron: What caused the Ethical Collapse? a). Summary:
Kenneth Lay, former chairman and CEO of Enron Corp., claimed to be a moral...
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