Applying a Decision -Making Framework Checkpoint

Applying a Decision-Making Framework Checkpoint

ACC/ 260

September 15, 2011

Applying a Decision-Making Framework Checkpoint

The ethics case we are discussing here is about Anne Distagne, CEO of Linkage Construction, and Sue Fault, CFO of the same company (Business and Professional Ethics, 2007, p. 288). A situation has occurred where Anne has told Sue to revise figures so the steady 22-25 percent growth in sales, profits, and earnings per share was continued instead of being at 35 percent (Business and Professional Ethics, 2007, p. 288).

Q: Who are the stakeholders involved in this decision?

A: The stakeholders are Anne, the CEO of the company, and Sue, the CFO of the company. Anne wants Sue to revise current growth in sales and profits to show less than what it actually is, as it facilitated her dealings with the bank for expansion capital. Sue must decide how to handle this situation.

Q: What are the ethical issues involved?

A: In Anne’s case, her motivation is based too narrowly on self-interest in making herself look good, and is resulting in unethical decisions for the company and in her orders to Sue to make revisions that are false. In Sue’s case, what Anne is asking her to do is putting her in an impossible position. While Sue understands what Anne is asking her to do, she knows that the request goes against all moral and ethical standards that are set by GAAP and the Sarbanes-Oxley Act. Sue would be risking her job and her reputation, as well as possibly facing jail time and fines if she does the revisions as Anne has asked.

Q: What should Sue do?

A: Sue should not alter the records as Anne has requested, and she should report Anne to the Board of Directors of the company. The Board should be made aware of the poor decision making on Anne’s part, because decisions such as this could jeopardize the reputation of the company if word got out about her request for revisions. The company could suffer huge losses because the integrity and trust...