Financial decidion making
Christine Thomas
ACC/260
Due: May 29, 2014
Donna Adams
Management Choice
1. Who are the stakeholders involved in this decision?
The stakeholders involved are Anne Distagne the CEO of Linkage Construction, Inc. and Sue Fault the CFO of Linkage Construction, Inc. But this decision effects many other stakeholders; the public, board of directors, the president of the company, employees, etc.
2. What are the ethical issues involved?
Altering the company’s work in progress
Altering financial statements by under reporting expected profits
Altering job costs by reclassifying the $124,000 R&D costs
Anne’s undue threat to Sue in regards to her obligation to the company and doing as she is told versus her obligation to following the ethical code of conduct as a professional accountant and following proper GAAP.
3. What should Sue do?
Sue has a moral, ethical, and professional obligation to tell her boss, Anne Distagne (CEO) the ramifications in making adjustments to existing figures just to “look good” and get back on track with one person’s policy. They both are employed by the same company and while not readily recognized they are both bound by rules of Virtual Expectation. Anne’s motivations are based on self-interest, fear, and pride not that of the company. Since Anne makes it clear she does not want to hear Sue’s explanation and therefore tries to use her undue influence to coerce Sue into altering the financial statements per her request, Sue is bound to ensure the interests of the public is upheld first and that the accounting profession’s code of ethics and professional conduct is next. She is left with no other alternative but to go to the president and board of directors with this information. That she has been ordered to adjust the books to reflect a lower percentage of profits on each job and reallocating the $124,000 in R&D costs.
By using the seven steps to ethical decision making provided by the American Accounting Association this
ACC/260
Due: May 29, 2014
Donna Adams
Management Choice
1. Who are the stakeholders involved in this decision?
The stakeholders involved are Anne Distagne the CEO of Linkage Construction, Inc. and Sue Fault the CFO of Linkage Construction, Inc. But this decision effects many other stakeholders; the public, board of directors, the president of the company, employees, etc.
2. What are the ethical issues involved?
Altering the company’s work in progress
Altering financial statements by under reporting expected profits
Altering job costs by reclassifying the $124,000 R&D costs
Anne’s undue threat to Sue in regards to her obligation to the company and doing as she is told versus her obligation to following the ethical code of conduct as a professional accountant and following proper GAAP.
3. What should Sue do?
Sue has a moral, ethical, and professional obligation to tell her boss, Anne Distagne (CEO) the ramifications in making adjustments to existing figures just to “look good” and get back on track with one person’s policy. They both are employed by the same company and while not readily recognized they are both bound by rules of Virtual Expectation. Anne’s motivations are based on self-interest, fear, and pride not that of the company. Since Anne makes it clear she does not want to hear Sue’s explanation and therefore tries to use her undue influence to coerce Sue into altering the financial statements per her request, Sue is bound to ensure the interests of the public is upheld first and that the accounting profession’s code of ethics and professional conduct is next. She is left with no other alternative but to go to the president and board of directors with this information. That she has been ordered to adjust the books to reflect a lower percentage of profits on each job and reallocating the $124,000 in R&D costs.
By using the seven steps to ethical decision making provided by the American Accounting Association this