1. What is the ethical issue in this situation?

2. What are the alternatives?

3. Who are the stakeholders? What are the possible consequences to each? Analyze from the following standpoints: (a) economic, (b) legal, and (c) ethical.

4. Place yourself in the role of the decision-maker. What would you do? How would you justify your decision?

Issue 1. Daylight Bank recently appointed the accounting firm of Jones, Gilroy, and Franks as thebank's auditor. Daylight quickly became one of Jones, Gilroy. and Franks largest clients. Becauseit is subject to banking regulations, Daylight must accrue for any expected losses on notesreceivable that Daylight may not collect in full.During the course of the audit, Jones, Gilroy, and Franks determined that three large notesreceivable seemed questionable. The auditors discussed these loans with Lisa Smith, the controllerof Daylight, Smith assured the auditors that these notes were good and that the makers of the noteswould be able to pay their notes after the economy improves.Jones, Gilroy, and Franks stated that Daylight must record a loss for a portion of these notesreceivable to account for the likelihood that Daylight may never collect their full amount. Smithobjected and threatened to dismiss the auditors if they demanded that the bank record the loss. Jones, Gilroy, and Franks wants to keep Daylight as a client. In fact, the firm was counting on therevenue from the Daylight audit to finance an expansion. (edited) [3:55 PM]

Issue 2. Cari Morris executive vice president of University Bank. Active in community affairs,Morris serves on the board of directors of The Salvation Army. The Salvation is expanding rapidlyand is considering relocating. At a recent meeting, The Salvation Army decided to buy 250 acresof land on the edge of town. The owner of the property is Oliver West, a major depositor inUniversity Bank. West is completing a bitter divorce, and Morris knows that West is eager to sellhis property. In view of Wests difficult situation, Morris believes West would accept a low offerfor the land. Realtors have appraised the $3.6 million. [3:55 PM]

Issue 3. University Bank has a loan receivable from Stevenson Chocolates. Stevenson is sixmonths late in making payments to the bank, and Joan Gus, a University Bank vice president, ishelping Stevenson restructure its debt.Gus learns that Stevenson is depending on landing a contract with Twix Foods, another UniversityBank client. Gus also serves as Twix Foods loan officer at the bank. She is aware that Twix isconsidering bankruptcy. No one else outside Twix Foods knows this. Gus has been a great help toStevenson, and Stevenson's owner is counting on Gus's expertise in loan work-outs to advise thecompany through this difficult process. To help the bank collect on this large loan, Gus has astrong motivation to alert Stevenson of Twix's financial difficulties

PLEASE HELP ON ISSUES 3 AND 4 ESPECIALLY