Tyler Resorts operates three properties, each with its own personnel, including a marketing/sales force. The corporate headquarters and central accounting office are in Tyler, and the properties are in Freeport, Rockport, and Bayport, all within 50 miles of Tyler. Corporate management treats each resort as an independent profit center and encourages competition among them. They each have similar but different product lines. As a competitive incentive, bonuses are awarded each year to the employees of the fastest growing and most profitable division. LO4 Don Henke is the manager of Tyler’s centralized computer accounting operation that keyboards the sales transactions and maintains the accounts receivable for all three divisions. Don came up in the accounting ranks from the Bayport resort where his wife, several relatives, and many friends still work.

As sales documents are keyboarded into the computer, the originating property is identified by code. Most sales documents (95%) are coded, but some (5%) are not coded or are coded incorrectly. As the manager, Don has instructed the keyboard operators to assign the Bayport code to all uncoded and incorrectly coded sales documents. This is done he says, “in order to expedite processing and to keep the computer files current since they are updated daily.” All receivables and cash collections for all three properties are handled by Tyler as one subsidiary accounts receivable ledger.

Instructions

(a) Who are the stakeholders in this situation?

(b) What are the ethical issues in this case?

(c) How might the system be improved to prevent this situation?