Premium Essay

Cognitive Processes and Ethical Decision Making in Acc

In: Business and Management

Submitted By gchen001
Words 462
Pages 2
Case 2-8 Juggyfroot
“I’m sorry, Lucy. That’s the way it is,” Ricardo Rikey said.
“I just don’t know if I can go along with it, Rikey,” Lucy replied. “We have no choice. Juggyfroot is our biggest client,
Lucy. They’ve warned us that they will put the engagement up for bid if we refuse to go along with the reclassification of marketable securities,” Rikey explained.
“Have you spoken to Fred and Ethel about this?” Lucy asked. “Are you kidding? They’re the ones who made the decision to go along with Juggyfroot,” Rikey responded.
The previous scene took place in the office of Deziloo
LLP, a large CPA firm in Beverly Hills, California. Lucy
Spheroid is the partner on the engagement of Juggyfroot, a publicly owned global manufacturer of pots and pans and other household items. Ricardo Rikey is the managing partner of the office. Fred and Ethel are the two members of the firm that make final judgments on difficult accounting issues, especially when there is a difference of opinion with the client.
All four are CPAs.
Ricardo Rikey is preparing for a meeting with Norman
Baitz, the CEO of Juggyfroot. Rikey knows that the company expects to borrow $5 million next quarter and it wants to put the best possible face on its financial statements to impress the banks. That would explain why the company reclassified a $2 million market loss on a trading investment to the availablefor- sale category so that the “loss” would now show up in stockholder’s equity, not as a charge against current income.
The result was to increase earnings in 2013 by 8 percent. Rikey also knows that without the change, the earnings would have declined by 2 percent and the company’s stock price would have taken a hit.
In the meeting, Rikey points out to Baitz that the investment in question was marketable, and in the past, the company had sold similar investments in less…...

Similar Documents

Premium Essay

Ethical Decision-Making in the Military Decision-Making Process

...Ethical Decision-Making in the Military Decision-Making Process Contribution to the JSCOPE 2000 Conference “Moral Considerations in Military Decision Making”. Dr. D. (Desiree) Verweij Lieutenant Colonel G.A.A.M. (Gérard) Cloïn (drs.) Major E.C. (Erhan) Tanercan MED (drs.) E-mail: ilmo@army.disp.mindef.nl Tel: +31 76 527 46 53 begin_of_the_skype_highlighting +31 76 527 46 53 end_of_the_skype_highlighting Introduction A great deal has changed in the Royal Netherlands Army (RNLA) in recent years. Not only has the task of the RNLA changed, but so has its composition. To begin with the first aspect: the task of the RNLA and that of the armed forces as a whole has been extended. This means that operations outside the Netherlands in all manner of international frameworks, such as the UN and NATO, have become the rule rather than the exception. The composition of the RNLA and of the armed forces has also changed. We no longer have conscripts in our army; we have all-volunteer forces, forces that wish to reflect society on a number of important counts. One of the significant consequences of the changes in respect of the new task and composition of the armed forces is the confrontation with different cultures and with different and new values and standards. To ensure that military personnel are able to deal with this situation in a professional manner, education in ethics is extremely important. This article elaborates on...

Words: 5155 - Pages: 21

Premium Essay

Ethical Decision Making and Ethical Leadership

...ETHICAL DECISION MAKING AND ETHICAL LEADERSHIP To improve ethical decision making in business, one must first understand how individuals make ethical decisions in an organizational environment. Too often it is assumed that individuals in organizations make ethical decisions in the same way that they make ethical decisions at home, in their family, or in their personal lives. Within the context of an organizational work group, however, few individuals have the freedom to decide ethical issues independent of organizational pressures. ETHICAL – ISSUE INTENSITY The first step in ethical decision making is to recognize that an ethical issue requires an individual or work group to choose among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong. Ethical issue intensity, then, can be defined as the relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization. it is personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressure prevailing at a particular place and time. Ethical – issue intensity reflects the ethical sensitivity of the individual or work group that faces the ethical decision – making process. Research suggest that individuals are subject to six “spheres of influence” when confronted with ethical choices – the workplace, family, religion, legal system,......

Words: 3754 - Pages: 16

Premium Essay

Ethical Decision Making

...Ethical Decision Making Lisa Stanley Grand Canyon University: HLT 305 April 18, 2012 Ethical Decision Making The ethical dilemma here is about a six year old child rush to the hospital for medical treatments. The six year old symptoms consist of convulsions and violent vomiting while attending school. The attending physician made a diagnosis of Meningitis and suggested medical treatment. However, being the parents are both Christian Scientists and decided against medical treatment, but the attending physician initiate medical treatment anyway causing a lawsuit by the parents against the and hospital. Since both parents are Christian Scientists, practicing Christian Science, It would be in the physician best interest to respect their wishes. Christian Science teaches Christian Science teaches that it’s never God's will for anyone to suffer, be sick, or die. Instead, it shows how God is entirely good, and therefore his will for each of us is only health and life (Christian Science, 2012).If I was in the position of the physician and hospital, I would respect the parent’s wishes. We should respect others beliefs and or religions because we never know when we may be put into a position to utilize our religion or belief, and besides it may save us a lawsuit in the long run. In this particular situation Contextual Features would be appropriate for use, because it covers all grounds for the parent’s wishes to be follow among other things that may have hin-dered......

Words: 527 - Pages: 3

Free Essay

Values and Ethical Decision Making

...Values and Ethical Decision Making MGT/521 September 10, 2012 Value Systems and Ethical Decision Making Ethical systems combine different values, morals, and principals. Values are character traits that define individual behavior. Morals are the ideals that separate right from wrong. Principals are ideals that put values and morals into action. Together each of these components influences decisions on a business and personal level. Companies use codes of ethics to dictate employee behavior when dealing with customers, vendors, investors, and coworkers. Codes of ethics incorporate characteristics of individual value systems, including honesty, integrity, trust, and fairness. The four-step process that governs ethical behavior includes character, obligation, results, and equity; these four traits also known as CORE. The Williams Institute Ethics Awareness Inventory provides insight into individual value systems. An analysis of each individual value system provides confirmation that personal values are often the foundation for establishing organizational values. A clear understanding of these values makes ethical reasoning more effective. During the hiring process personal perspectives and preferences often go unchecked. A balanced approach is necessary when seeking to fill a vacant position. Although an individual’s ethical perspective weighs heavily to one of the four traits, evaluation of the remaining three perspectives is mandatory when making a......

Words: 1432 - Pages: 6

Premium Essay

Ethical Decision Making

...Ethical Decision Making  Ethics are principles that define behavior as fair and proper and they are concerned with how a moral person should behave when it comes to making an ethical decision (Josephson Institute of Ethics, 2002). Evaluating and deciding among competing options is often key in making a fair choice since principles do not always dictate a single "moral" course of action.  The decision of whether to lay off workers to enhance profits or to cut corners on quality to meet a deadline are examples of some choices regarding ethics business owners may face (Poznak Law Firm, 2003). The use of extremely low-wage foreign workers, like in the Nike organization case, is a current concern and the subject is a complex one.  There are many valid differences of opinion regarding what constitutes ethical behavior and how ethical decisions should be made and the subject is a complex one (Poznak Law Firm, 2003). There are always pros and cons involved with any choice and the decision itself can be quite time consuming. When it comes to deciding whether or not to use cheap labor to cut costs, businesses must examine the ethics behind their decision-making processes.  Four approaches that business owners commonly use to analyze ethical dilemmas are the utilitarian approach, which focuses on taking the action that will result in the greatest good for the greatest number of people; the moral rights approach, which is concerned with moral principles, regardless of the......

Words: 1178 - Pages: 5

Premium Essay

Delegation and Ethical Decision Making

...Delegation and Ethical Decision Making Student’s Name Institution Date Question 1 Delegation Delegation is a process by which a task’s responsibility and authority is transferred to individual who accepts the transfer. It is based on effective up-down and down-up communication in an organization or unit. However, the delegator retains accountability for the tasks delegated (Lipe & Beasley, 2004). The five rights of delegation are the right task, circumstances, person, communication and supervision. Considering the right task, a task may only be delegated if the delegator has responsibility and authority over it and if it has not been delegated to them. From the right circumstances, a task is appropriate for delegation if it does not involve personal information or confidential issues that the person is not allowed to access. Considering the right person, tasks that require specific skills, knowledge and attitudes can only be delegated to a person who has such qualities. The right communication implies that a task will be appropriate for delegation if there are clear instructions and information concerning it. Lastly, a task that requires a certain level supervision and monitoring, cannot be delegated unless that level of monitoring and supervision is available. These rights of delegation are applied in decisions concerning what tasks a manager will delegate and to whom the tasks will be delegated (Lipe & Beasley, 2004). Question 2 Ethical......

Words: 432 - Pages: 2

Premium Essay

Acc 260 Week 4 Critiquing Philosophical Approaches to Ethical Decision Making

...ACC 260 Week 4 Critiquing Philosophical Approaches to Ethical Decision Making Get Tutorial by Clicking on the link below or Copy Paste Link in Your Browser http://hwguiders.com/downloads/acc-260-week-4-critiquing-philosophical-approaches-to-ethical-decision-making/ For More Courses and Exams use this form ( http://hwguiders.com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) As a student we are required to evaluate the philosophical approaches for each scenario from Appendix B. Evaluating whether or not the reasoning for the course of action listed makes sense. While working on the evaluation of the philosophical approaches we will discuss if the course of action is the most ethical, the best reasons for making the choices, and the reasons for believing this alternative is ethical. Consequentialism is the intent to maximize the usefulness of a decision. For this the relevance of this act depends on its consequences. For this approach it is essential to have a good ethical decisions and perception of it. With this it is important for students to analyze a decision in how the harmful and/or the benefits. This many philosophers’ debate ht consequences should count Deontology is different because it focuses on the obligation or duty in motivating the decision or the actions of the consequences. This depends on the respect, rights, and fairness. This approach brings up issues related......

Words: 6500 - Pages: 26

Premium Essay

Ethical Decision Making Model

...CHAPTER 2 – Ethical Decision Making Model Objectives: * To know the definition of Ethics, * To discuss Principles of Ethical Conduct * To identify the Ideas organizing Principle of Ethics * To provide a systematic way of making ethical decision. * To encourage, motivate you to think about Ethical Decision you make. Meaning of Ethics Ethics: * Ethics provides a set of standards for behavior that helps us decide how we ought to act in a range of situations. In a sense, we can say that ethics is all about making choices, and about providing reasons why we should make these choices. moving from a primary focus on teaching employees to master the knowledge, skills, and job behaviors and apply them to the day-to-day activities (Making Choices: Ethical Decisions at the Frontier of Global Science) * Ethics refers to principles that define behavior as right, good and proper. Such principles do not always dictate a single "moral" course of action, but provide a means of evaluating and deciding among competing options. * The terms "ethics" and "values" are not interchangeable. Ethics is concerned with how a moral person should behave, whereas values are the inner judgments that determine how a person actually behaves. Values concern ethics when they pertain to beliefs about what is right and wrong. Most values, however, have nothing to do with ethics. For instance, the desire for health and wealth are values, but not ethical......

Words: 1909 - Pages: 8

Premium Essay

Ethical Decision Making and Hiring

...Ethical Decision Making and Hiring My Name MGMT314 Management Ethics University Instructor Abstract Established morals identified by an organization is a vital step in the ethical decision-making process and ultimately its success. The development of a Code of Ethics is the pivotal point in establishing what an organization stands for ethically and morally. From business decisions to hiring processes, ethics will drive all of these decisions. There are multiple facets to the development of the Code of Ethics and there is not a one size fits all approach to the development process. Once the Code of Ethics has been identified a Code of Conduct must be established. Both of these aspects do not amount to anything if the people upholding the code choose to not act accordingly. A well-established Code of Ethics can build a strong workforce through advertisement and hiring. This paper explores the development of the Code of Ethics, Code of Conduct, and applicable hiring processes that guide a company’s vision and success. Ethical Decision Making and Hiring Every day there a businesses identified in the news that have been caught up in scandals. Those scandals are usually ethical violations such as misappropriation of funds, conflicts of interest, lapsed licensing, improper or fraudulent billing, sexual harassment, discrimination, safety violations, and poor work conditions. These incidents are direct violations of an organizations Code of Ethics. ...

Words: 1532 - Pages: 7

Free Essay

Ethical Decision Making

...negative impact of this decision on the company is the potential recall and reproduction of the toys by the company. If the shipped toys are recalled and reproduced, the company will end up incurring a lot of costs. The costs are transporting the toys to and from the school and the cost of reproducing new ones. The overall result is ruining the image of the company and losses. The most important issue to note from this decision is that it is totally unethical. Subjecting children to such harmful substances implies that the company is irresponsible and is not adhering to ethical practices. Another possible solution to the whistle problem is to transport the products to a different country where the products meet the standards required in that country. This is because different countries across the world have different manufacturing standards and regulations. By doing so, the company will not experience any financial loss. The money raised from selling the products in another country will be now used to produce products that meet the requirements of the federal government and sell them to South America though there will be a delay. However, the decision will have a different impact on the quality assurance department. Considering such an option will imply that the work done by the quality assurance department is not being appreciated and is not meaningful to the company. However, the most important thing to note from such a decision is that the company will...

Words: 2373 - Pages: 10

Premium Essay

Making Ethical Decisions

...Making Ethical Decisions When it comes to business ethics, businesses are concerned with morality and fairness in behavior, actions and the policies that take place within that business. Ethical issues arise at many different levels, but at the organization level these issues carry consequences for the organizations’ reputation and success in the community. How an ethical issue is handled within the organization may have serious organizational consequences. It is very important that corporations make sound ethical decisions and take into account that not only can it impact the business; it can also have a major impact on the community it serves and society as a whole. When making ethical decisions, there needs to be clarity. One must determine what the ethical issue/problem is and what needs to be decided. Organizations need to formulate several alternatives and eliminate any impractical, illegal and unethical solutions to the problem. Organizations should examine each option to determine which ethical principles and values are involved. Organizations also need to evaluate and recognize the impacts of their decisions. Organizations should take into consideration if any of the decisions they are making requires the sacrifice of any ethical principle and they should evaluate both the facts and assumptions of the issue at hand. Also, in making ethical decisions, organizations should consider the......

Words: 622 - Pages: 3

Premium Essay

Ethical Decision Making

....................90 vi 4 Constructions of leadership in a small enterprise....................................................95 4.1 Small company managers' leadership conceptions................................................95 4.1.1 Categories of leadership conceptions..........................................................95 When you talk about this leadership as a person..........................................96 But it is not active leadership that I would like to have................................99 If there is trust.............................................................................................106 We should have commitment towards those people...................................110 Making strategies, clear decisions, goals to pursuit...................................113 The leadership of that unit should be carefully handled.............................118 If you come from the course you are number one......................................121 It cannot be run as a one man’s show.........................................................124 He commonly does as he pleases................................................................127 One should be in the position to develop the business...............................129 He is an expert leader.................................................................................132 He is the master, he owns the Company.....................................................134 4.1.2......

Words: 100514 - Pages: 403

Premium Essay

Values and Ethical Decision Making

...Values and Ethical Decision Making Learning Team A Kevin Davis, Desmond Harris, David Stevens MGT 521 January 30, 2010 Richard Lewis Values and Ethical Decision Making Individuals and organizations make multiple decisions every day. Making decisions involves making a choice between two or more alternatives (Nickels, McHugh, & McHugh, 2010). Some of these choices are small, like what flavor of ice cream to buy, whereas other choices are big, like should a corporate executive take a bribe. Making ethical decisions is important for an organization’s success. An individual’s personal values and ethics help guide decision making. Organizational values also play a role in making decisions. Ethics awareness inventories help identify a person’s ethical perspective and how that perspective may conflict with organizational values to influence decisions. Values Evaluating personal values Norfolk Southern values can be evaluated through the individual actions, accomplishments, and achievements that have institutionalized the company’s commitment and many years of service. The personal leadership at Norfolk Southern developed the company’s long-term strategic formula for success in the railroad industry. The personal values of Norfolk Southern leaders, like former Chief Executive Officer David R. Goode, developed the company’s mission and vision and helped build a top company within the industry. Mr. Goode’s personal actions throughout countless situations helped guide......

Words: 1651 - Pages: 7

Free Essay

Decision Making Processes

...Decision Making Processes Anthony D. Smith, Angel Shorty, and Timothy Stearman University of Phoenix Problem formation and identification vary in contrast from one organization to another. Organizations use different tools and techniques to solve problems that affect their internal and external stakeholders. Companies know that their reputation and reliability to their stakeholders rely on the decisions they make every day. Because of the importance of almost every decision that affects a stakeholder, companies have implemented models of decision making in which an outlined form of collaboration and goal setting have reduced the negative impacts of their decision making. Decisions are the key to their success. In the following text we will look at three different organizations and how the decision making processes affects their internal and external stakeholders. Unilever North America Ice Cream (NAIC) Unilever is a global leader in manufacturing that produces many products ranging from Ben&Jerry’s Ice Cream to Axe personal care products. Their organization has their corporate headquarters in Switzerland where all of the top executives in the organization reside and conduct and communicate their business through what they call Virtual Regional Sites. Unilever uses the coalition model in their decision making. For example, all parts of the organization are divided up into different buckets such as safety, overall equipment efficiency, quality,......

Words: 342 - Pages: 2

Premium Essay

Business Ethical Decision Making

...Introduction Ethical behavior is generally expected to be conducted within a business by its managers and employees. When business ethics is spoken by business people of it usually means one of three things (1) avoid breaking the criminal law in one’s work-related activity; (2) avoid action that may result in civil law suits against the company; (3) avoid actions that are bad for the company image (Erwin 2011). . Ethical issues in business will occur but can be solved and avoided in many cases that can help a company continue to be successful. Using an ethical decision making process will guide companies and its employees in the right direction to success and respect within the communities they serve. Most people involved in business whether functioning as a small business owner, employee, or chief executive officer of a multination company eventually face ethical or moral dilemmas in the workplace. Such dilemmas are usually complex, for they force the person making the decision to weigh the benefits that various business decisions impart on individuals including him or herself and groups with the negative repercussion that those same decisions usually have on other individuals or groups. What is Ethics? Business ethics is a subject that can be difficult to define. Any discussion of business ethics is a subjective one, for everyone brings different concepts of ethical behavior to the table. These moral standards are shaped by all sorts of things, from home environment......

Words: 2343 - Pages: 10