REDSTONE COMPTECH ANALYTIKS Aleeyah Watlington-Smith is a Cost Analyst for Redst

Question

REDSTONE COMPTECH ANALYTIKS

              Aleeyah Watlington-Smith is a Cost Analyst for Redstone CompTech, a technology research company located in Phoenix, Arizona. One of her responsibilities is to make future research cost projections. Back in September 2017, Aleeyah made a highly favorable projection of costs for the next 8 years for Redstone’s new generation computer, LIFETIMETECHIE.    Aleeyah presented the projections to the R&D Group who decided to expand research and development of the computer. This decision led to dislocations of some plant personnel who were reassigned to one of the company’s newest plants in Lansing, Michigan.   Fortunately, no employees were terminated. In fact, an additional 125 people were hired at the new Michigan facility.

            Last week, on May 31st, Aleeyah rechecked her computations on the cost projections. Unexpectedly she found that he had made an error that would increase her cost projections substantially. It is very fortunate, however, that costs of LIFETIMETECHIE computers had NOT yet exceeded previous cost projections and management is very pleased with the decision to expand research and development on the project.

            Aleeyah is not sure what to do now.   She wonders if she should confess her honest mistake and possibly jeopardize any possible promotions she might be granted. She reasons that no one will catch the error because the cost of LIFETIMETECHIE had not greatly exceeded projections to date.    What’s more interesting is that it appears that costs will materialize close to the projections.

Write a memo to Aleeyah Watlington-Smith.   Address the following questions about which Ms. Watlington-Smith has concerns:

            1. Who are the stakeholders in this situations and what are the potential
                 risks associated with each?

            2. Identify the ethical issues involved in this situations.

            3. What are the possible alternative actions for Aleeyah?

            4. What do you recommend that Aleeyah should do?

Explanation / Answer

Stakeholders

R&d group

Employees

Owner/shareholder of company

Potencial risk

1) Risk of default made by company

2) risk of project not achieve its target

3) Risk of company made fraud to its stakeholders

Ethical issue involved

True & fair disclosure may not be made by directors

Violation of professional ethics and penalty for same

Aleeyah should disclose mistake made by him to directors and stakeholder otherwise it will lead to violation of professional ethics

Alternative actions

Aleeyah can disclose her mistake to director and stakeholders

Alleyah can bare amount of loss occurred due to her mistake

Alleyaah should disclose such things with proper office

Aleeyah should accept mistake done by her with related person

Recommendation

Alleyah should accept the mistake done by her as it will minimize her liability and will not going to lead violation of professional ethics

So aleeyah should disclosed mistaked made by her

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