Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

hi there can u please help me to make assignment? just part 2 needed. ACC563 Assignment 2 Answer All Questions 1. Do you believe that

image text in transcribed

hi there can u please help me to make assignment? just part 2 needed.

image text in transcribed ACC563 Assignment 2 Answer All Questions 1. Do you believe that our beliefs trigger our actions, or do we act and then justify our actions by changing our beliefs? Explain. 2. Do you believe that a person's stage of moral development and personal moral philosophy play a role in how values and actions are shaped in the workplace? Explain. 3. Explain why moral problems may be of greater intensity than nonmoral problems. Question 4: Case 1- FDA Liability Concerns Gregory and Alex started a small business based on a secret-recipe salad dressing that got rave reviews. Gregory runs the business end and makes all final operational decisions. Alex runs the creative side of the business. Alex's salad dressing was a jalapeno vinaigrette that went great with barbeque or burgers. He got so many requests for the recipe and a local restaurant asked to use it as the house special, that Alex decided to bottle and market the dressing to the big box stores. Whole Foods and Trader Joe's carried the dressing; sales were increasing every month. As the business grew, Gregory and Alex hired Michael, a college friend and CPA, to be the CFO of the company. Michael's first suggestion was to do a five-year strategic plan with expanding product lines and taking the company public or selling it within five to seven years. Gregory and Alex weren't sure about wanting to go public and losing control, but expanding the product lines was appealing. Michael also wanted to contain costs and increase profit margins. Page 97At Alex's insistence, they called a meeting with Michael to discuss his plans. \"Michael, we hired you to take care of the accounting and the financial details,\" Alex said. \"We don't understand profit margins. On containing costs, the best ingredients must be used to ensure the quality of the dressing. We must meet all FDA requirements for food safety and containment of food borne bacteria, such as listeria or e coli, as you develop cost systems.\" \"Of course,\" Michael responded. \"I will put processes in place to meet the FDA requirements.\" At the next quarterly meeting of the officers, Alex wanted an update on the FDA processes and the latest inspection. He was concerned whether Michael understood the importance of full compliance. \"Michael,\" Alex said, \"the FDA inspector and I had a discussion while he was here. He wanted to make sure I understood the processes and the liabilities of the company if foodborne bacteria are traced to our products. Are we doing everything by the book and reserving some liabilities for any future recalls?\" Michael assured Alex and Gregory that everything was being done by the book and the accounting was following standard practices. Over the next 18 months, the FDA inspectors came and Michael reported everything was fine. After the next inspection, there was some listeria found in the product. The FDA insisted on a recall of batch 57839. Alex wanted to recall all the product to make sure that all batches were safe. \"A total recall is too expensive and would mean that the product could be off the shelves for three to four weeks. It would be hard to regain our shelf advantage and we would lose market share,\" Michael explained. Alex seemed irritated and turned to Gregory for support, but he was silent. He then walked over to where Michael was sitting and said, \"Michael, nothing is more important than our reputation. Our promise and mission is to provide great-tasting dressing made with the freshest, best, organic products. A total recall will show that we stand by our mission and promise. I know we would have some losses, but don't we have a liability reserve for recall, like a warranty reserve?\" \"The reserve will not cover the entire expense of a recall,\" Michael said. \"It will be too expensive to do a total recall and will cause a huge loss for the quarter. In the next six months, we will need to renew a bank loan; a loss will hurt our renewal loan rate and terms. You know I have been working to get the company primed to go public as well.\" Alex offered that he didn't care about going public. He didn't start the business to be profitable. Gregory, on the other hand, indicated he thought going public was a great idea and would provide needed funds on a continuous basis. Alex told Michael that he needed to see all the FDA inspection reports. He asked, \"What is the FDA requiring to be done to address the issue of listeria?\" \"I'm handling it, Alex,\" Michael said. \"Don't worry about it. Just keep making new salad dressings so that we can stay competitive.\" \"Well, Michael, just answer what the FDA is asking for.\" \"Just to sterilize some of our equipment, but it shouldn't be too bad.\" \"Michael, it's more than that,\" Alex responded. \"The FDA contacted me directly and asked me to meet with them in three days to discuss our plans to meet the FDA requirements and standards. We will be fined for not addressing issues found in prior inspections. I want to see the past inspection reports so I can better understand the scope of the problem.\" \"Listen, Alex,\" Michael said. \"I just completed a cost-benefit analysis of fixing all the problems identified by the FDA and found the costs outweighed the benefits. We're better off paying whatever fines they impose and move on.\" \"Michael, I don't care about cost-benefit analysis. I care about my reputation and that of the company. Bring me all the inspection reports tomorrow.\" The three of them met the following day. As Alex reviewed the past inspection reports, he realized that he had relied on Michael too much and his assurances that all was well with the FDA. In fact, the FDA had repeatedly noted that more sterilization of the equipment was needed and that storage of the products and ingredients needed additional care. Alex began to wonder whether Michael should stay on with the company. He also was concerned Page 98about the fact that Gregory had been largely silent during the discussions. He wondered whether Gregory was putting profits ahead of safety and the reputation of the company. Questions Alex knows what the right thing to do is. As Alex prepares for a meeting on the inspection reports the next day, he focuses on influencing the positions of Michael and Gregory, both of whom will be involved in the meeting. Put yourself in Alex's position and answer the following questions. 1. What are the main arguments you are trying to counter? That is, what are the reasons and rationalizations you need to address? 2. What is at stake for the key parties, including those who disagree with you? 3. What levers can you use to influence those who disagree with you? 4. What is your most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the argument be made? When and in what context? Question 5: Case 2 - A Faulty Budget Jackson Daniels graduated from Lynchberg State College two years ago. Since graduating from college, he has worked in the accounting department of Lynchberg Manufacturing. Daniels was recently asked to prepare a sales budget for the year 2016. He conducted a thorough analysis and came out with projected sales of 250,000 units of product. That represents a 25 percent increase over 2015. Daniels went to lunch with his best friend, Jonathan Walker, to celebrate the completion of his first solo job. Walker noticed Daniels seemed very distant. He asked what the matter was. Daniels stroked his chin, ran his hand through his bushy, black hair, took another drink of scotch, and looked straight into the eyes of his friend of 20 years. \"Jon, I think I made a mistake with the budget.\" \"What do you mean?\" Walker answered. \"You know how we developed a new process to manufacture soaking tanks to keep the ingredients fresh?\" \"Yes,\" Walker answered. \"Well, I projected twice the level of sales for that product than will likely occur.\" \"Are you sure?\" Walker asked. \"I checked my numbers. I'm sure. It was just a mistake on my part.\" Walker asked Daniels what he planned to do about it. \"I think I should report it to Pete. He's the one who acted on the numbers to hire additional workers to produce the soaking tanks,\" Daniels said. \"Wait a second, Jack. How do you know there won't be extra demand for the product? You and I both know demand is a tricky number to project, especially when a new product comes on the market. Why don't you sit back and wait to see what happens?\" \"Jon, I owe it to Pete to be honest. He hired me.\" \"You know Pete is always pressuring us to 'make the numbers.' Also, Pete has a zero tolerance for employees who make mistakes. That's why it's standard practice around here to sweep things under the rug. Besides, it's a one-time eventright?\" \"But what happens if I'm right and the sales numbers were wrong? What happens if the demand does not increase beyond what I now know to be the correct projected level?\" \"Well, you can tell Pete about it at that time. Why raise a red flag now when there may be no need?\" As the lunch comes to a conclusion, Walker pulls Daniels aside and says, \"Jack, this could mean your job. If I were in your position, I'd protect my own interests first.\" Page 100Jimmy (Pete) Beam is the vice president of production. Jackson Daniels had referred to him in his conversation with Jonathan Walker. After several days of reflection on his friend's comments, Daniels decided to approach Pete and tell him about the mistake. He knew there might be consequences, but his sense of right and wrong ruled the day. What transpired next surprised Daniels. \"Come in, Jack\" Pete said. \"Thanks, Pete. I asked to see you on a sensitive matter.\" \"I'm listening.\" \"There is no easy way to say this so I'll just tell you the truth. I made a mistake in my sales budget. The projected increase of 25 percent was wrong. I checked my numbers and it should have been 12.5 percent. I'm deeply sorry; want to correct the error; and promise never to do it again.\" Pete's face became beet red. He said, \"Jack, you know I hired 20 new people based on your budget.\" \"Yes, I know.\" \"That means ten have to be laid off or fired. They won't be happy and once word filters through the company, other employees may wonder if they are next.\" \"I hadn't thought about it that way.\" \"Well, you should have.\" Here's what we are going to do...and this is between you and me. Don't tell anyone about this conversation.\" \"You mean not even tell my boss?\" \"No, Pete said.\" Cwervo can't know about it because he's all about correcting errors and moving on. Look, Jack, it's my reputation at stake here as well.\" Daniels hesitated but reluctantly agreed not to tell the controller, Jose Cwervo, his boss. The meeting ended with Daniels feeling sick to his stomach and guilty for not taking any action. Questions 1. What are Daniels's options in this situation? Use ethical reasoning to identify the best alternative. What would you do if you were in Daniels' position? 2. Given that you have decided to take some action even though you had agreed not to do so, who would you approach to express your point of view and why? 3. What is at stake for the key parties? 4. What are the main arguments you are likely to encounter in making the strongest case possible? 5. What is your most powerful and persuasive response to the reasons and rationalizations you may need to address? To whom should the argument be made? When and in what context

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Linear Algebra with Applications

Authors: Steven J. Leon

7th edition

978-0131857858

Students also viewed these Accounting questions