Identify the issues, define your ethical decision making model and ethical theory, explain the options and consequences, and pick the solution you would choose, and why, for the following situation:
Hal, controller and CPA, has been burning the midnight oil trying to finish the year-end financial statements for Morris, Inc. This year is an important year for the company. The company is projected to make a profit after five years of product development and losses. In trying to complete the year-end financials, Hal is finding that the numbers are not adding up and that the company seems to have overstated assets and income by $2.5 million. Based upon the short investigation that he has been able to do, it seems that the CEO and CFO have signed some documents which have inflated the numbers.
Hal is pressured by time (i.e., a filing deadline of tomorrow to get the information to the printers for the shareholders’ meeting) and the following other considerations: The shareholders have been promised that an Initial Public Offering (IPO) of the company will be done within the next year. The banks have been patient in providing lending during the rough patch, but will have to declare the loans in default and demand immediate re-payment if the numbers are not close to break-even. The majority shareholder is the widow of the founder, who was renowned as a highly ethical person. (Her share in the company is the basis for her retirement pension providing around-the-clock nursing care.) Hal has his own personal pressures as he recently purchased a new $500,000 house, using the last of his savings as a down payment. His wife has recently taken an unpaid leave from her job due to a difficult pregnancy requiring total bed rest and medical bills.
What should Hal do?
The paper requirements:
- Must be 7 double-spaced pages in length (not including title and references pages) and formatted according to APA style
- Must use at least five references