EYK12-7. Accounting Ethics Case Due to an economic recession, Anton Corporation faces severe cash flow problems. Management forecasts that payments to some suppliers will have to be delayed for several months. Jay Newton, controller, has asked his staff for suggestions on selecting the suppli- ers for which payments will be delayed. "That's a fairly easy decision," observes Tim Haslem. "Some suppliers charge interest if our pay- ment is late, but others do not. We should pay those suppliers that charge interest and delay payments to the ones that do not charge interest. If we do this, the savings in interest charges will be quite substantial." "I disagree," states Tara Wirth. "That position is too bottom line' oriented. It's not fair to de lay payments only to suppliers who don't charge interest for late payments. Most suppliers in that Category are ones we have dealt with for years; selecting these suppliers would be taking advantage of the excellent relationships we have developed over the years. The fair thing to do is to make pro- rata payments to each supplier." "Well, making pro-rata payments to each suppliest means that all our suppliers will be upset because no one receives full payment," comments Sue Myling. "I believe it is most important to maintain good relations with our long-term suppliers; we should pay them currently and delay pay- ments to our newer suppliers. The interest costs we end up paying these newer suppliers are the price we must pay to keep our long-term relationships solid." Required Which suppliers should Jay Newton select for delaved payments? Discuss. EYK 12-7 Ethics case Who are the Stakeholders? Is it ethical to purposely pay vendors late? It is ethical to select vendors to pay late based on whether or not they will charge you interest? It is ethical to pay long-time vendors while delaying payments to newer vendors? Is it ethical to pay all vendors a portion of what you owe them? What are alternatives to paying vendors late