Accounting Ethics (Case Study)

Choose one of the following real-life cases involving an ethical dilemma:
Betty Vinson from WorldCom (in the textbook)
Jeffrey Skilling at Enron (in additional reading links for this Unit;)
Michael Vines at HealthSouth (in the textbook)
Write a paper, approximately three pages (plus Bibliography and title page), analyzing the ethical decision-making process the person involved in the dilemma may have undertaken,
using the format described below. You will need to research other sources in order to write a
credible paper. You will also have to apply critical thinking skills and analysis.
Formatting requirements: Double-spaced, 12 point Arial or Times New Roman font, one inch
margins.
Bibliography citing the textbook and other web or book sources from which you gathered
information. Minimum number of sources for “B” grade: 3.
Make sure that you are concise. Headers and bullet-points are encouraged for clarity.
Suggested structure for the paper:
Paragraph one: Clearly describe the main ethical dilemma facing the decision maker you have
chosen. You may want to describe how or why the dilemma arose.
Paragraph two: Describe what the decision-maker ACTUALLY did, and the Kohlberg stage
that the decision-maker was acting at and why it applies. Then delineate the positive and
negative consequences that arose or may have arisen from that choice. These should be
done as headers with bullet points, for clarity.
Paragraph three: Identify a different possible course of action that could have been taken, and
the Kohlberg stage that would lead to that choice.
Again, bullet multiple positive and negative consequences for the individual–this time making
sure that you include consequences for the company and the relevant stakeholders.
Paragraph four: Identify a second possible course of action that could have been taken.
Continue with the same requirements as Paragraph three.

Paragraph five (and six)–OPTIONAL–add additional courses of action and analyze as above
Last paragraph: Discuss briefly what YOU would do in the situation and why (based on
Kohlberg and other considerations). Write a concluding sentence that summarizes the theme
of your paper.
Here is a partial example of what the paper should cover in substance.
Assume that the following was a real-life case, and you were assigned to analyze this
scenario from the point of view of Ms. CPA:
A client asked Ms. CPA to hide income on a tax return. Ms. CPA’s boss also wanted her to do
it. Ms. CPA is a single mother with minimal savings. Her dilemma? Does she break the law or
disobey the boss?

Ethical dilemma: Does Ms. CPA comply with her fiduciary responsibility to follow the law, or
does she do what the client and her boss want her to do, which violates ethical principles?
What Ms. CPA did: She told her boss that she did not feel comfortable committing this fraud;
she said she would not be able to do it as a licensed CPA. She then asked her boss if this is
typical of the way business is done in this firm.
This was Kohlberg stage four (law abiding)
Positive consequences:
Ms CPA had respect for herself, and she would not face professional or legal censure.
her boss would know that she was a person of integrity
even if she did lose my job over this, that would be better in the long run than a lifetime of fraudulent transactions that could lead to incarceration and loss of license
the client would be confident that the firm had integrity, and had his best long-term interests at
heart–especially if there were legal alternatives presented that could also result in a lower tax
bill.
Negative consequences that may have occurred:
her boss may have been temporarily be angry with her, and talking to him would have been
difficult.
This might affect the kinds of client assignments she would get in the future.
There is an outside chance that she might have lost her job, and she would have faced the
loss of income, which may have affected her family.
The firm might have lost that client.
A different possible course of action: Do what the client (and boss) wants. This would be a
combination of Kohlberg stage two (doing an action to get paid or keep a job) or stage three
(trying to look good to boss or client by complying)
Positives: client and boss will be happy; Ms CPA will not have to worry about job loss for
insubordination; difficult discussion with boss could be avoided.
Negatives: Ms. CPA cannot live with the guilt of breaking the law; she has to hide her actions
from her kids; her boss pushes Ms. CPA to do even worse things in the future; eventually Ms.
CPA is indicted; client gets caught and blames the CPA firm.
A second possible course of action: Realize that working for this firm is not a good “fit”
ethically, Ms. CPA quits. This could be Kohlberg stage 2: (taking care of herself, and taking the
consequences of loss of employment) or it could be Stage 4/stage 5 (following the rules of society even if one has to experience personal difficulties)
Positives: Ms. CPA feels ethically good about herself; client and boss have the chance to fact
the fact that they might not be doing the right thing; law is not broken and third-party
stakeholders do not suffer bad consequences
Negatives: Ms. CPA and her family must face the loss of income; client and firm might just
continue with their deception, with “Ms. Goody Two-Shoes” out of the way
Etc….keep going with the parameters for the paper.