Ethics Cases Instructions+ + You will complete both case 2-55 and 3-53 from your textbook. When completing the case, you must make sure to address all questions thoroughly and use proper grammar. + 1. Case 2-55 Cost Information and Ethical Behavior, Service Organization (page 65)+ a. Clearly identify the ethical dilemma(5).+ b. List all stakeholders (minimum of 3).+ C. List all possible courses of action (may use bullets). Include at least three possible courses of action.+ d. Thoroughly answer all the required case questions from the textbook. + 2. Case 3-53 Suspicious Acquisition of Data, Ethical Issues (page 115)+ a. Clearly identify the ethical dilemma(s).+ b. List all stakeholders (minimum of 3).+ C. List all possible courses of action (may use bullets). Include at least three possible courses of action.+ d. Thoroughly answer all of the case questions from the textbook.+ 3. Additional requirements:+ a. Due Tuesday, October 15, 2019.+ b. All work must be completed in a Microsoft word document. If I can't read the document it is not going to receive a grade. + c. Document must be uploaded to Turnitin assignment in ulearn under week 6.+ d. Use proper grammar and complete sentences.+ e. Reference any sources.+ +Case 2-55 Cost Information and Ethical Behavior, Service Organization Jean Erickson, manager and owner of an advertising company in Charlotte, North Carolina, arranged a meeting with Leroy Gee, the chief accountant of a large, local competitor. The two are lifelong friends. They grew up together in a small town and attended the same university. Leroy is a competent, successful accountant but is having some personal financial difficulties after some of his investments turned sour, leaving him with a $15,000 personal loan to pay off just when his oldest son is starting college. Jean, on the other hand, is struggling to establish a successful advertising business. She had recently acquired the rights to open a branch office of a large regional advertising firm headquar tered in Atlanta, Georgia. During her first 2 years, she was able to build a small, profitable prac- tice. However, the chance to gain a significant foothold in Charlotte hinged on the success of winning a bid to represent the state of North Carolina in a major campaign to attract new industry and tourism. The meeting she had scheduled with Leroy concerned the bid she planned to submit. Jean: Leroy, I'm at a critical point in my business venture. If I can win the bid for the state's advertising dollars, I'll be set. Winning the bid will bring $600,000 to $700,000 of revenues into the firm. On top of that, I estimate that the publicity will bring another $200,000 to $300,000 of new business. Leroy: I understand. My boss is anxious to win that business as well. It would mean a huge increase in profits for my firm. It's a competitive business, though. As new as you are, I doubt that you'll have much chance of winning. Jean: You're forgetting two very important considerations. First, I have the backing of all the resources and talent of a regional firm. Second, I have some political connections. Last year, I was hired to run the publicity side of the governor's campaign. He was impressed with my work and would like me to have this business. I am confident that the proposals I submit will be very competitive. My only concern is to submit a bid that beats your firm. If I come in with a lower bid and good proposals, the governor can see to it that I get the work. Leroy: Sounds promising. If you do win, however, there will be a lot of upset people. After all, they are going to claim that the business should have been given to local advertisers, not to some out-of-state firm. Given the size of your office, you'll have to get support from Atlanta. You could take a lot of heat. Jean: True. But I am the owner of the branch office. That fact alone should blunt most of the criticism. Who can argue that I'm not a local? Listen, with your help, I think I can win this bid. Furthermore, if I do win it, you can reap some direct benefits. With that kind of business, I can afford to hire an accountant, and I'll make it worthwhile for you to transfer jobs. I can offer you an up-front bonus of $15,000. On top of that, I'll increase your annual salary by 20%. That should solve most of your financial difficulties. After all, we have been friends since day one and what are friends for? Leroy: Jean, my wife would be ecstatic if I were able to improve our financial position as quickly as this opportunity affords. I certainly hope that you win the bid. What kind of help can I provide? Jean: Simple. To win, all I have to do is beat the bid of your firm. Before I submit my bid, I would like you to review it. With the financial skills you have, it should be easy for you to spot any excessive costs that I may have included. Or perhaps I included the wrong kind of costs. By cutting excessive costs and eliminating costs that may not be directly related to the project, my bid should be competitive enough to meet or beat your firm's bid. Required: 1. What would you do if you were Leroy? Fully explain the reasons for your choice. What do you suppose the code of conduct for Leroy's company would say about this situation? 2. What is the likely outcome if Leroy agrees to review the bid? Is there much risk to him per- sonally if he reviews the bid? Should the degree of risk have any bearing on his decision?to have? Explain. Case 3-53 Suspicious Acquisition of Data, Ethical Issues OBJE Bill Lewis, manager of the Thomas Electronics Division, called a meeting with his controller, Brindon Peterson, and his marketing manager, Patty Fritz. The following is a transcript of the conversation that took place during the meeting: Bill: Brindon, the variable costing system that you developed has proved to be a big plus for our division. Our success in winning bids has increased, and as a result our revenues have increased by 25%. However, if we intend to meet this year's profit targets, we are going to need something extra am I right, Patty? Patty: Absolutely. While we have been able to win more bids, we still are losing too many, par- ticularly to our major competitor, Kilborn Electronics. If we knew more about their bidding strategy, we could be more successful at competing with them. Brindon: Would knowing their variable costs help? Patty: Certainly. It would give me their minimum price. With that knowledge, I'm sure that we could find a way to beat them on several jobs, particularly on those jobs where we are at least as efficient. It would also help us to identify where we are not cost competitive. With this informa- tion, we might be able to find ways to increase our efficiency. Brindon: Well, I have good news. I've been talking with Carl Penobscot, Kilborn's assistant con- troller. Carl doesn't feel appreciated by Kilborn and wants to make a change. He could easily fit into our team here. Plus, Carl has been preparing for a job switch by quietly copying Kilborn's accounting files and records. He's already given me some data that reveal bids that Kilborn made on several jobs. If we can come to a satisfactory agreement with Carl, he'll bring the rest of the information with him. We'll easily be able to figure out Kilborn's prospective bids and find ways to beat them. Besides, I could use another accountant on my staff. Bill, would you authorize my immediate hiring of Carl with a favorable compensation package? Bill: I know that you need more staff, Brindon, but is this the right thing to do? It sounds like Carl is stealing those files, and surely Kilborn considers this information confidential. I have real ethical and legal concerns about this. Why don't we meet with Laurie, our attorney, and deter- mine any legal problems? Required: 1. Is Carl's behavior ethical? What would Kilborn think? 2. Is Bill correct in supposing that there are ethical and/or legal problems involved with the hir- ing of Carl? (Reread the section on corporate codes of conduct in Chapter 1.) What would you do if you were Bill? Explain