2. Prepare a budgeted balance sleel asU Cases & Projects CP 22-1 Ethics in Actio

Question

2. Prepare a budgeted balance sleel asU Cases & Projects CP 22-1 Ethics in Action 2 The director of marketing for Starr Computer Co., Megan Hewitt, had the f discussion with the company controller, Cam Morley, on July 26 of the current year Ethics Megan: Cam, it looks like I'm going to spend much less than indicated on my July budget. Cam: I'm glad to hear it. Megan: Well,l'm not so sure it's good news. l'm concerned that the president will see that I'm under budget and reduce my budget in the future. The only reason I look good is because we delayed an advertising campaign Once the campaign hits in September, 'm sure my actual expenditures will go up. You see, we are also having our sale September numbers. Cam: I don't think that's anything to worry about. We all expect some variation in actual spending month to month tion in September. Having the advertising campaign and the convention at the same time is going to kilmy What's really important is staying within the budgeted targets for the year. Does that look as if it's going to bea problem? Megan: I don't think so, but just the same, l'd like to be on the safe side. Cam: What do you mean?

Explanation / Answer

Ans. The decision to inflate the budget by including the expenses of the sales convention so as to have requisite budgetary allowance for the advertising campaign is unethical and should not be allowed. Budgets should reflect the actual picture and not be inflated by inclusion of fictitious figures.

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