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Ethics Case discussion 8: CT 12-6

NuComp Company operates in a state where corporate taxes and workers compensation insurance rates have recently doubled. NuComps president has just assigned you the task of preparing an economic analysis and making a recommendation relative to moving the entire operation to Missouri. The president is slightly in favor of such a move because Missouri is his boyhood home and he also owns a fishing lodge there.

You have just completed building your dream house, moved in, and sodded the lawn. Your children are all doing well in school and sports and, along with your spouse, want no part of a move to Missouri. If the company does move, so will you because the town is a one-industry community and you and your spouse will have to move to have employment. Moving when everyone else does will cause you to take a big loss on the sale of your house. The same hardships will be suffered by your coworkers, and the town will be devastated.

In compiling the costs of moving versus not moving, you have latitude in the assumptions you make, the estimates you compute, and the discount rates and time periods you project. You are in a position to influence the decision singlehandedly

Instructions

1. How will the capital investment and budgeting decision be made?
2. What accounting issues would be involved in this scenario?

2. Follow the 6-step below to address the ethical dilemma.
   1. Summarize the relevant facts
   2. Identify the ethical issues from the facts
   3. Determine who is affected by the outcome of the dilemma and how each person or group is affected
   4. Identify the alternatives available to the person who must resolve the dilemma
   5. Identify the likely consequence of each alternative.
   6. Decide the appropriate action

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