Kenny Hampton is an accountant for Bartley Company. Early this year Kenny made a highly favorable projection of sales and profits over the next 3 years for Bartley’s hot-selling computer PLEX. As a result of the projections Kenny presented to senior management, they decided to expand production in this area. This decision led to dislocations of some plant personnel who were reassigned to one of the company’s newer plants in another state. However, no one was fired, and in fact the company expanded its work force slightly.

Unfortunately Kenny rechecked his computations on the projections a few months later and found that he had made an error that would have reduced his projections substantially. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its decision. Kenny, however, is not sure what to do. Should he confess his honest mistake and jeopardize his possible promotion? He suspects that no one will catch the error because sales of PLEX have exceeded his projections, and it appears that profits will materialize close to his projections.

Instructions

(a) Who are the stakeholders in this situation?

(b) Identify the ethical issues involved in this situation.

(c) What are the possible alternative actions for Kenny? What would you do in Kenny’s position?