As controller of a widely held public company, you are concerned with making the best decisions for the stockholders. At the end of its first year of operations, you are faced with the choice of method to value inventory. Specific identification is out of the question because the company sells a large quantity of diversified products. You are trying to decide between FIFO and LIFO. Inventory costs have increased 33% over the year, and therefore, you think LIFO will most accurately match these most recent costs with the revenues of the period. The chief executive officer has instructed you to do whatever it takes in all areas to report the highest income possible. Required Use the Ethical Decision Framework in Exhibit 1-9 to complete the following requirements:

1. Recognize an ethical dilemma: What ethical dilemma(s) do you face?

2. Analyze the key elements in the situation:

a. Who may benefit if you follow the chief executive officer's instructions? Who may be harmed?

b. How are they likely to benefit or be harmed?

c. What rights or claims may be violated?

d. What specific interests are in conflict? e. What are your responsibilities and obligations?

3. List alternatives and evaluate the impact of each on those affected:

As controller, what are your options in dealing with the ethical dilemma(s) you identified in (1) above?

4. Select the best alternative: Among the alternatives, which one would you select?