Case study 1
1. What decisions or actions taken by the individuals in this case are questionable? The first problems identified in this case was that the company had no laws and regulations. I think the decisions of everyone in this case are questionable. No one, from the board of directors, Jamie, Don, and Randy, is willing to stand up to Rulan and hold him accountable for his actions. With the information given it seems at Rulan is more concern about micromanaging trivial things like the color of the carpet than setting corporate laws or regulations. Because there is no regulations in place Rulan seem to look over the important issues within the company. Within the background of Rulan they spoke about how one class in college help make him think he was a master of accounting. The company also was paying for expensive for at least one person that wasn’t an employee of BBDE. Jamie received receipts for the trip to Europe and noticed the company also was paying for Rulan wife to travel along before the conference. There was no proof of how much the travel expenditures actually came to, but there was a reimbursement check written five week before. Rulan was making decisions that affected the company, with no input from the board or staff. BBDE’s management, board of directors, and Don were mismanaging or not managing the company correctly. Rulan and Don’s management ideas seemed to be if you can get away with it then do it. 2. Who is being affected by the issues you identified in question 1? Are the effects good or bad? The people that are being affected the most is the entire company. The lack of regulations within the company are having a negative affect on the company and the employees, Jamie and Don were just an example of how Don’s action are affection the employees. If the problems continue the employees will find other companies to work for or Don could bankrupt the company. BBDE could also be facing federal and local lawsuits for the mismanagement of funds. 3. List each action that the CEO, the controller, and the board of directors could take at the end of the case. What would be the consequences of each course of action? The actions for the CEO, the Controller, and the board could take is to get BBDE to focus on account ability and to create regulations for all members of the board, management team, and employees to abide by. These changes must include changes in operational functions and increased communication between management and employees and management and the board of directors. A big hurdle for BBDE will be to get Rulan to give up control over the day to day operations and turn it over to the management team. Rulan will be able to just oversee and give insight. Rulan’s micromanagement attitude for the small things and lack luster attitude for the important things has become a big problem and soon it will become a big mess by not creating regulation. I think by creating new regulations the Consequences of this action would alien the company but maybe loose a good leader, Rulan has proven over the past 20 years BBDE is a growing thriving company. The board should offer him a position on the board of directors or give up all day to day operation. 4. Consider each of the actions you identified in the previous question. What do you think each individual or group should do? What do you think each individual or group would do? Explain. I think the problem for BBDE is that Rulan is the founder and CEO. Rulan is focusing the small things within the company and himself outside the company with the trips. The board of directors and management should start providing leadership to help meet the company’s goals and start regulating the leadership team to behave ethically and support employees. Over the time Don has been at the company, he has discovered a pattern of unethical behavior from the board members to Rulan. Don needs to either step...
Noreen, Eric W., Peter C. Brewer, and Ray H. Garrison. Managerial Accounting for Managers. New York: McGraw-Hill Irwin, 2011. Print.
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