You are the Accountant for Duke Street, Inc. and your boss asksyou to provide the bank with a profit forecast for the coming year.Sales and profitability have both been trending downward over thelast five years. Technological advancements have made the currentproduct less attractive. Duke has developed a new productconsistent with their perceptions of consumer behavior. The companyis requesting a loan from the bank to launch the new product; theloan is very necessary. The forecast that you provide to the bankwill determine whether or not the bank issues the much neededloan.
Your boss is convinced that profits will be at least $500,000 –anything less than $500,000 and the bank will not approve the loan.Your analysis indicates three possible outcomes:
Outcome 1: If sales of the new product are extraordinary, thenprofits will exceed $500,000.
Outcome 2: If sales of the new product are modest, then theprofits will be $100,000. This is most likely to occur.
Outcome 3: If the sales of the new product fail, then thecompany will experience a loss of $600,000
If the bank does not grant the loan, then the new product willnot launch and bankruptcy is a real possibility for thecompany.
REQUIRED:
Include at least two sources, appropriately cited andreferenced.
NOTE: The following questions are not in anyparticular order. ORGANIZE your discussion in a logicalmanner.
Discuss the ethical implications and demonstrate yourdecision-making processes for the above scenario. Below arequestions that may help guide your discussion. The questions are aguide (a sentence or two answering each question is insufficient).You should provide a well-organized thoughtful discussion of theethical situation and the business/organizational problem that thecompany faces.
What ethical dilemma does the accountant face?
What business problem(s) does the company have?
Who are the potential stakeholders and how might they beaffected by the decision of the accountant?
What choices does the accountant have? Evaluate the choices,i.e. who benefits or who is hurt by the choice(s).
What action would you recommend, i.e. how do you believe thebusiness problem should be resolved? How should the ethical dilemmabe resolved?
Going forward, what should the company do regardingorganizational ethics?
