Ethical Issues

evaluate ethical issues and communicate professional responsibilities they may encounter in a business environment.

Scenario:

Residence Suites operates a regional hotel chain. Each hotel is operated by a general manager and an assistant manager/controller. Many of the staff who run the front desk, clean the rooms, and prepare the breakfast buffet work part-time or have a second job, so turnover is high.

The assistant manager/controller, William Wright asked the new bookkeeper to help prepare the hotel's master budget. The master budget is prepared once a year and submitted to company headquarters for approval. Once approved, the master budget is used to evaluate the hotel's performance. These performance evaluations affect hotel managers' bonuses; they also affect company decisions about which hotels deserve extra funds for capital improvements.

When the budget was almost complete, Wright asked the bookkeeper to increase amounts budgeted for labor and supplies by 15%. When asked why, Wright responded that the general hotel manager, Patty Pad told him to do this when he began working at the hotel. Patty explained that this budgetary cushion gave her flexibility in running the hotel. For example, because company headquarters tightly controls capital improvement funds, she can use the extra money budgeted for labor and supplies to replace broken televisions or to pay "bonuses" to keep valued employees. William Wright initially accepted this explanation because he had observed similar behavior at his previous place of employment.

Put yourself in William Wright's position. In deciding how to deal with the situation, consider the following questions:

1. What is the ethical issue?

2. What problems do you see in this companies accounting system and what are your options?

3. What are the possible recommendations and possible consequences?

4. What should you do?

Required:

Write a 1 -2 page paper (double spaced) that includes an overview of the following:

a) Introduction to the topic of ethics, what ethics is and how it relates to this scenario.

b) Ethical responsibilities in the accounting profession, using supplemental resources, citing the sources you are using and how it may relate to this scenario.

c) Conflict resolution options when an individual is faced with an ethical dilemma.

d) Conclusion to wrap up your thoughts.