Confidentiality and Integrity of the Solution - Essay Example

Ethical case study Affiliation Ethical case study Introduction The issue facing Lisa as the Finance manager of the Home andPersonal Care Products is proving to the CFO of the company that was acquired why the marketing costs were not to be capitalized. She was concerned about maintaining ethical standards when the acquired company was coming together with the parent organization. According to the IMA guidelines that are used for resolution of an ethical conflict, Lisa is supposed to discuss the conflict with her immediate supervisor who is Jeffrey Anderson. She was more concerned to know if the acquired company had used inappropriate accounting practices to inflate their earnings or sales. She took the initiative to consult Jeffrey Anderson and was well prepared with the accounting manual of the parent company and the plan for valuation of the assets that belong to the company. Since, Jeffrey Anderson was a respected individual in the company, having served for more than a decade Lisa expected that he would have advised her on the way to approach the issue professionally to find a solution and to maintain confidentiality and integrity. Discussion The acquired company and the parent company are the main stakeholders in the issue that Lisa is trying to get solutions for. Lisa finds herself unprepared for the cultures within the corporate, and she did not believe that the acquired firm had used the appropriate financial rules and regulations. She was tasked to make sure that the assets of the corporate she was working for were secure. Lisa noted that the employees were more concerned in securing their jobs. Workplace ethics are some causes that make employees sacked especially during such strategic transitions that Lisa is encountering (Lawrence & Weber, 2013). According to the IMA guidelines that are used for ethical conflict resolution, Lisa is supposed to maintain confidentiality and ensure that she discusses it in details with the Controller. The reason why ethical standards should be maintained in businesses is to ensure that there is smooth flow and function of the advanced market economy. In addition, if there were no ethical standards in business, so many aspects would suffer particularly the economy and the people who depend on it for goods, services and jobs (Lawrence & Weber, 2013). Lisa provides clear, accurate and concise evidence to support her discoveries regardless of being turned down three times by Mr. Anderson. Lisa is keen not to abandon the ethical standards in the company as the finance manager. In her line of work, Lisa focused on the acquired assets and noted the unusual high proportion of some of the assets that were indicated in the balance sheets. Most company managers will tend to overlook this section for the reason that the items in that category are noncore assets. Lisa found it hard to determine the nature for the items that were on the list of the acquired company and how they were relevant to the company’s activities. Lisa did not give up after the first meeting with Anderson. She put more efforts to conduct a detailed evaluation of the assets in the list and discovered that there were many capitalized marketing expenses. She noted that the company had used expensive and controversial commercials such as television ad print to campaign for the prestige fragrances. Lisa took the expected measure and consulted Anderson after she made these discoveries. Mr. Anderson does not seem to take the issue as an urgent matter. Instead, he rubbishes Lisa’s claim by saying that it is not a significant issue, and she should not worry about it. Lisa is stuck since, Anderson is her immediate controller of her department, and she has to follow his directions. She is however concerned about the ethical standards of the issue at hand since she knows well that if she approves the acquired company with the issue of capitalized costs; she will at some point be answerable when evaluation is done. Since the first option that Lisa has does not work out, she is tasked to look for an alternative. Mr. Anderson keeps dismissing the issue every time she comes with new discoveries. On the last instance, Lisa approaches Anderson regarding the issue of other accrued liabilities. She requests for the standing journal entry that support the documentation of the other accrued liabilities. Anderson turns her down and insists that it is none of her business. Anderson is quick to assert that Lisa does not understand and comprehend the business, and the journal entries are standard practice. He claims that if Lisa understood the nature of uncertainty of the prestige fragrance business, she would be able to go in line with what the company wants. The dilemma that Lisa faces is how to challenge Mr. Anderson ad keep the acquired team close to her. She is also not ready to lose the trust of both the finance team and Mr. Anderson. She still does not believe that these costs should be capitalized and the other acquired liabilities do not provide evidence. The only alternative she is left with is discussing the conflict with the next highest uninvolved manager (Lawrence & Weber, 2013). Lisa is keen not to engage in activities that might discredit her profession. Since Anderson is not able to mitigate for the conflict due to either hidden interests of ignorance, Lisa has to protect her profession by going deeper into the issue until she finds the story behind the issue. Conclusion I would advice, Lisa to inform the next highest uninvolved manager in the company about the issue. However, this should be done without the knowledge of Mr. Anderson since he might take it as a challenge for his position. It is however difficult not to involve Mr. Anderson since the board of directors has entrusted him because he has served in the company for quite a long time. Lisa should maintain all the discoveries she made and discussed with Mr. Anderson. Despite risking her profession, she should ensure that she would not be held responsible for the problems that may arise in the future when the acquired company is evaluated. Such as situation is normal for many businesses and it takes the efforts of the finance a manager to identify and question where they do not understand, or there appears to be inappropriate values on the statements. References Lawrence, A. T., & Weber, J. (2013). Business and society: Stakeholders, ethics, public policy. Read More