1-26 Professional ethics and reporting division performance. Joshua Wilson is th
ID: 2540565 • Letter: 1
Question
1-26 Professional ethics and reporting division performance.
Joshua Wilson is the controller of Apex Frame Mouldings, a division of Garman Enterprises. As the division is preparing to count year-end inventory, Wilson is approached by Doug Leonard, the division’s president. A selection of inventory previously valued at $150,000 had been identified as flawed earlier that month and as a result was determined to be unfit for sale. Leonard tells Wilson that he has decided to count the selected items as regular inventory and that he will “deal with it when things settle down after the first of the year. After all,” and adds, “the auditors don’t know good picture frame moulding from bad. We’ve had a rough year, and things are looking up for next year. Our division needs all the profits we can get this year. It’s just a matter of timing the write-off.” Leonard is Wilson’s direct supervisor.
Required:
1. Describe Wilson’s ethical dilemma.
2. What should Wilson do if Leonard gives him a direct order to include the inventory?
Explanation / Answer
1. Wilson's ethical dilemma include the breach of integrity, competence and credibility.
If Wilson follow the orders of Leonard, he would not carry out his duties ethically, communicating unfavorable information, breaching integrity principle.
If Wilson follow the orders of Leonard, he would not perform his professional duties in accordance with laws and regulations.
If Wilson follow the orders of Leonard, he would not report information fairly and objectively and cannot disclose the actual status of the inventory as unfit for sale.
Therefore, Wilson's ehtical dilemma in this situation are Integrity, competence and credibility.
2. If Leonard gives him a direct order to include the inventory, Wilson should not accept his order, or , Wilson should refuse his order. If it is needed, Wilson can report the matter to corporate controller of the company.
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