Identify/discuss the ethical dilemma(s) you find in the case and who has the responsibility for acting in that dilemma.

Indicate at least 3 options the character in the dilemma had available to him and what probable consequences of each option would be.

Describe the option that the character chose to take.

Indicate whether you would have taken the same course of action. Whether you would or not, discuss why your answer is yes or no to taking the same action.

There are 4 standards in the IMA Standards of Professional Ethical Conduct. Of the 4, which 2 of these standards were more likely to be potentially compromised in this case? By whom and how so?

IDON 1940-204A A Tale of Missing..Parts Nicholas J. Fessler, CMA, CPA The University of Texas at Tyler INTRODUCTION upper management review team. Therefore, he was surprised to learn that involvement with the project was serving as a black mark lowering his performance evaluation rating. For the record, he agreed with neither reason; however, that did not change his performance evaluation rating, Unlike other examples of unethical behavior you might study, no one described in this case became ridiculously wealthy or wound up in prison in South America; no one was sued nor did a business fail. In fact, no one even lost their job. Yet ethical challenges occurred; the events portrayed herein have been disguised and fictionalized, but they largely occurred as described. That is to say, the events of this tale" are not fiction but rather historical fact. THE BEGINNING: ALAN AND THE PCS PROJECT A DISAPPOINTING PERFORMANCE EVALUATION Alan left his performance evaluation confused and a little angry. He had recently accepted a position at the division level where he was part of a small group that reported directly to Doug Stevens, the division accounting and finance manager (without an intervening accounting and finance supervisor). This was the first performance evaluation Alan experienced with his manager. Alan's performance evaluation rating was lower than he had expected, for two reasons. First, Doug told Alan that he (Doug) was limited in the number of high ratings he could give employees, so there were not enough high ratings available for Alan to receive one, too. Second, Doug reminded Alan that he (Alan) been involved with the Parts Catalog Solution (PCS) project. From Alan's perspective, he had performed his job not only correctly but well; he used the information he was provided to correctly prepare the financial forecast and the supporting documentation required by the Alan learned about the history of the PCS project from the project leader, Keith. The tale began quite simply with a major manufacturer of motorized apparatuses, Green Engines, announcing that, effective at the end of the year, the company would no longer supply parts catalogs in a CD (compact disc) format to its dealers free of charge. It was April of that very year when Alan had his first meeting with Keith, who explained that at the end of the year, dealers would have two choices of products they could use to replace the free parts catalogs. The first choice would be for dealers to purchase the digital copies of the same materials from Green Engines (Green Engines was simply tired of incurring costs associated with providing this data); this would be the least-expensive option for dealers and would utilize the same ordering processes that dealers were already familiar with. The second choice would be for dealers to subscribe to a continuously updated online solution. This was a more expensive option for the dealers but also a more functional choice. An online solution offered an casier way to find the desired part(s), and orders could be placed directly via the online system, there was no need for CD updates or to separately place orders. a Alan and Keith were both employed by one of the three competing companies that had developed an online solution: More Than Parts, Inc. (MTP), a large, multinational corporation. MTP had developed an online parts catalog solution that was already being beta-tested by a limited number of Green Engines dealers. MTP's two competitors were already selling their comparable products to dealers, so MTP was the slowest competitor getting its product to the market. Yet PCS was arriving with arguably the most technologically sophisticated offering of the three competitors, which would hopefully benefit MTP. ABOUT ALAN Alan, the proverbial hero (or perhaps villain) of this tale, had graduated with a degree in accounting and has worked for MTP for nearly two years. Before beginning work, he had taken and passed both the CMA (certified management accountant) exam and CPA (certified public accounting) examon his first try, Alan might addand was currently in the process of completing the necessary work experience so he could add those valuable initials to his business cards.' Alan was working as a financial analyst, a position that any accounting or finance graduate could apply for; for example, the colleague in the cubicle next to Alan was an undergraduate finance major who had been hired directly into the position he currently held (very similar to Alan's). Alan was a little more experienced than this colleague because Alan was the veteran of a training program and was in his fourth position at the company. One of the tasks Alan performed in his role as financial analyst was to provide cost accounting support for new product proposals, like the PCS project. development, Keith did not take a vacation. During the project-approval process, Keith spent a few days at the beach with his wife and children, but he seemed to leave the office and take the vacation reluctantly. While on his short vacation, Keith stayed in contact with the rest of the team, including Alan, via email and text. Alan thought Keith acted as though he had staked his career on the success of this project. Maybe he had; he seemed almost fanatical that MTP should be in this business. Because Green Engines was no longer going to supply CD catalogs for free, Keith considered this a rare opportunity to develop a strong foothold in what was effectively going to be a new market. The two other PCS team members that Alan interacted with were Jane and John; they were technically capable systems engineers who helped Keith. Like Keith, they had helped develop the software and technology for the PCS project; they were currently helping complete the project's development and get the project approved by the upper management review team. After project approval, Jane and John would assist with the maintenance of the PCS software and provide technical support to dealers who purchase the product. Then there was Alan, the financial analyst, who was recently added to the team to provide accounting and finance support for the project-approval process. Alan's duty as a financial analyst was to serve the Operations Division of MTP, Inc., of which Keith was a part. Alan's responsibilities included preparing annual budgets, monthly outlooks, variance analysis, and other special projects for the Operations Division manager. Alan was also responsible for providing revenue and cost summaries for new business proposals like Keith'sin short, "costing" a project proposal. Alan was assigned to the development team by Howard, Alan's supervisor. Howard was a tall, quiet-spoken man, perhaps seven years older than Alan. Like Alan, Howard had been hired by MTP right after college. Alan and Howard had a good relationship, perhaps in part because they both were graduates of the same corporate training program for accounting and finance professionals. Howard respected Alan and the work he performed on behalf of the operating division both of them supported. Alan recalls that the approval-process for the PCS project lasted many weeks and, on a number of occasions, involved late nights at work, particularly on those days when Alan was asked to revise the analysis after 4 p.m. (an effort that THE DEVELOPMENT TEAM FOR THE PCS PROJECT The PCS development team was a cross-functional group comprised of a number of individuals. Alan's primary source of information was Keith, the champion of the PCS project. Keith's education background was in programming and software development. Keith had been part of the PCS development team from its inception, which means that he participated in the two-year-long effort to develop the software and technology required to make PCS successful. Keith was energetic, charismatic, intelligent, and hard-working. For example, during those two years of typically required several hours of work). Keith, however, was a charismatic individual and clearly communicated his appreciation for Alan's efforts on behalf of the team. Alan remembers one night, in particular, toward the end of the project-approval process, when he, Keith, and Jane were leaving the office about midnight, and Keith told Alan: "I would be happy to have you on my team any time." But consistent with the complexities of modem business, Alan functioned simultaneously as a member of two distinct teams. Keith was not Alan's boss and did not give him performance evaluations or raises. Neither did Keith's manager. Rather Alan reported to his own accounting and finance organization management hierarchy. Like many other organizations, businesses, and corporations, the accounting and finance function at MTP had its own hierarchy and reporting structure. Financial analysts reported to a supervisor in the accounting and finance organization (Alan's supervisor was Howard). Accounting and finance supervisors reported to managers in the accounting and finance organization (Alan and Howard's manager was Doug Stevens). Accounting and finance managers reported to the corporation's chief financial officer (CFO). When working late into the night to improve the chance of success of Keith's team's project, it was easy for Alan to forget that he was a member of not only Keith's PCS project team but also Howard's accounting and finance team. Alan found project casting to be one of the most fun and rewarding parts of his job, because he realized that successful and profitable new business proposals like PCS are critical to improving the profitability of any company or corporation. Alan's role in the process was critical Accounting and finance professionals in many organizations are often asked to provide a gatekeeping function where they are expected to ensure that the financial information in business forecasts for new projects is as accurate as possible so that decision- makers can make the best decisions. At the same time, however, the primary source of information about new projects is typically someone outside the accounting and finance organization-like Keith. Alan remembers that at the time of the case, there were roughly 1,000 Green Engines dealers in the United States; most dealers were using the free CD catalogs provided by Green Engines. Based on information the salespeople provided to Keith, they estimated that 20% of all dealers had already subscribed to an online parts catalog product offered by one of PCS's competitors. Additionally, the salespeople and the PCS team expected that 50% of the remaining dealerships would purchase CD catalogs, while the other 50% would subscribe to an online parts catalog from PCS or one of its two other competitors (see Figure 2). Alan incorporated all of this information into the financial forecasts. PCS had advantages over its competitors because MTP's product was better than that of its competitors and because MTP was a subsidiary of Green Engines; its competitors had an advantage over PCS because they had competing products that were already available on the market for purchase and use. Alan knew that other programmers and technical staff had participated in the two-year development of PCS (in addition to Keith, Jane, and John), but those individuals would be moving on to other projects. The development cost of PCS was not included in the analysis prepared by Alan, as those costs had been borne elsewhere (and were economically "sunk" and irrelevant for purposes of the analysis prepared by Alan). Yet once the project was approved, salespeople and additional help desk/support personnel would be added to the team, and the cost of all those individuals were included by Alan in the financial forecast. First, seven salespeople were expected to join the project and would be responsible for selling PCS to Green Motors dealers. The salespeople were, practically, "leftovers" from another dealer-targeted project that was unsuccessful; unfortunately, MTP at the time did not have a good track record for selling products like PCS to Green Engines' dealers. Second, three additional help desk/support employees would also be added to the team to assist and support Jane, John, and Keith. Alan had previously prepared financial forecasts for a number of other project proposals and knew that a financial forecast was comprised of many lines of information. Typically, the first portions of the forecast prepared were the income statement and balance sheet, which included expected revenues, expected expenses, and expected acquisition of assets for the proposed project. The cash flow effects, and a number of performance measures such as ROI (return on investment) and NPV (net present value), were then calculated based on those inputs. THE FINANCIAL FORECAST, PREPARED BY ALAN Alan prepared the five-year financial accounting forecasts used by the upper management review committee to make a decision about whether or not to approve and fund the project, using the information provided by Keith. See Figure 1 for a visual summary of the major actors the PCS project team was interacting with during this project. The information items that Alan used to prepare the financial forecast for PCS are presented in Figure 3, in the format of an income statement. It is important to remember that Alan included only relevant costs in the analysis; that is, only new revenues and costs that would be created and incurred by the proposed project were included in the forecast. Based on the forecast prepared by Alan, the upper management review committee approved the project, the sales force and additional help desk/support personnel were brought on board, and the team went about the business of selling PCS to as many dealers as possible before the end of the year. UNEXPECTED TWISTS AS EVENTS CONTINUED a result, the project was almost immediately less profitable than had been projected. With the benefit of hindsight, it is reasonable to expect that when a major new competitor enters a market that market prices will adjust, but such an expectation was not incorporated into the forecast. The third and final unexpected twist was that international sales, not included in the original forecast, were substantial and improved the project's profitability. Green Engines' sales were primarily in the United States with the vast majority of its dealers located in the continental United States. Therefore, little thought was given to international sales in the original forecast. A few international dealers existed, however, and some of them were big (as in, they were among the largest dealers in the world). Many of those dealers chose to subscribe to not just one PCS but to five or six of them to use in multiple locations at the dealer's large facility. THE ACTORS The first unexpected twist was leamed very shortly after the PCS project's approval: there was a significant missing "part" to the analysis prepared by Alan that should have been included in the original project forecast. The dollar value of the missing information was large enough that it, by itself, required approval by the upper management review committee. Please note that approval by the upper management review committee was required to receive funding for new project expenditures in excess of a threshold amount of US$100,000. Errors in the forecast did not require approval (although the project manager could be expected to be held responsible for a project's success or failure); rather upper management approval was required because new (additional) expenditures were being requested that were not included in the original forecast, and they exceeded the approval threshold. Alan prepared the updated the forecast, which was then formally approved by the upper management review committee. Yet the rumor mill and Alan's performance evaluation conversation with Doug Stevens suggested that upper management review committee members were not amused that this information was not included in the original project proposal; Alan would point out that neither did the committee members notice the missing information (and could have noticed and questioned it just as easily as Howard or Alan). Because the original project proposal was not memorably profitable, it was unclear how such information might have changed the original decision; that is, it was possible that the upper management review committee might have rejected the project if all relevant financial information had been included in the original financial forecast. The second unexpected twist was that as soon as PCS officially entered the market, "market" prices fell dramatically because competitors lowered their prices. As There are three main actors in this story who, in some combination, were responsible for the missing "part" of the financial forecast The forecast was prepared by Alan. As we learned in the opening paragraphs, the project was a black mark on his following performance evaluation Haward was Alan's supervisor at the time of the case, and he received a demotion (from supervisor to senior financial analyst) in large part because of his role in this tale. Howard did not prepare the forecast and trusted Alan's competency, but perhaps he could have asked more critical questions when he reviewed and approved Alan's work. Keith was the project champion; he remained on the team and continued to champion and lead the project, suffering no ill effects of the project-approval process snafus. Keith was determined to ensure that the PCS project occurred. Therefore, with the benefit of hindsight, it seems reasonable to conjecture that Keith may have been willing to "stretch" the prospective financial numbers a bit to ensure the approval of the project, or maybe he "forgot to tell Alan about...some parts. Alan thinks this may very well have securred. He remembers that he asked Keith about the information that later proved "missing" and that Keith claimed those resources would be transferred to the project from the cost center where the development effort occurred. That transfer clearly did not happen, so the PCS project needed to request additional resources, and a second request for additional funds was made of the upper management review committee. Alan does not know whether Keith genuinely thought the transfer would occur and then it did not, or whether Keith intentionally misled Alan. Alan was inclined to believe that Keith would have been willing to mislead (or outright lie to) him given Keith's emotional and professional investment in the PCS project. Alan continues to claim about the PCS project: "I did my job right." At this point it no longer matter what Alan thinks; but rather what do you think? Do you think Keith lied to Alan, or not? Does your opinion of Alan (and Howard) change depending on whether or not Keith lied? IDON 1940-204A A Tale of Missing..Parts Nicholas J. Fessler, CMA, CPA The University of Texas at Tyler INTRODUCTION upper management review team. Therefore, he was surprised to learn that involvement with the project was serving as a black mark lowering his performance evaluation rating. For the record, he agreed with neither reason; however, that did not change his performance evaluation rating, Unlike other examples of unethical behavior you might study, no one described in this case became ridiculously wealthy or wound up in prison in South America; no one was sued nor did a business fail. In fact, no one even lost their job. Yet ethical challenges occurred; the events portrayed herein have been disguised and fictionalized, but they largely occurred as described. That is to say, the events of this tale" are not fiction but rather historical fact. THE BEGINNING: ALAN AND THE PCS PROJECT A DISAPPOINTING PERFORMANCE EVALUATION Alan left his performance evaluation confused and a little angry. He had recently accepted a position at the division level where he was part of a small group that reported directly to Doug Stevens, the division accounting and finance manager (without an intervening accounting and finance supervisor). This was the first performance evaluation Alan experienced with his manager. Alan's performance evaluation rating was lower than he had expected, for two reasons. First, Doug told Alan that he (Doug) was limited in the number of high ratings he could give employees, so there were not enough high ratings available for Alan to receive one, too. Second, Doug reminded Alan that he (Alan) been involved with the Parts Catalog Solution (PCS) project. From Alan's perspective, he had performed his job not only correctly but well; he used the information he was provided to correctly prepare the financial forecast and the supporting documentation required by the Alan learned about the history of the PCS project from the project leader, Keith. The tale began quite simply with a major manufacturer of motorized apparatuses, Green Engines, announcing that, effective at the end of the year, the company would no longer supply parts catalogs in a CD (compact disc) format to its dealers free of charge. It was April of that very year when Alan had his first meeting with Keith, who explained that at the end of the year, dealers would have two choices of products they could use to replace the free parts catalogs. The first choice would be for dealers to purchase the digital copies of the same materials from Green Engines (Green Engines was simply tired of incurring costs associated with providing this data); this would be the least-expensive option for dealers and would utilize the same ordering processes that dealers were already familiar with. The second choice would be for dealers to subscribe to a continuously updated online solution. This was a more expensive option for the dealers but also a more functional choice. An online solution offered an casier way to find the desired part(s), and orders could be placed directly via the online system, there was no need for CD updates or to separately place orders. a Alan and Keith were both employed by one of the three competing companies that had developed an online solution: More Than Parts, Inc. (MTP), a large, multinational corporation. MTP had developed an online parts catalog solution that was already being beta-tested by a limited number of Green Engines dealers. MTP's two competitors were already selling their comparable products to dealers, so MTP was the slowest competitor getting its product to the market. Yet PCS was arriving with arguably the most technologically sophisticated offering of the three competitors, which would hopefully benefit MTP. ABOUT ALAN Alan, the proverbial hero (or perhaps villain) of this tale, had graduated with a degree in accounting and has worked for MTP for nearly two years. Before beginning work, he had taken and passed both the CMA (certified management accountant) exam and CPA (certified public accounting) examon his first try, Alan might addand was currently in the process of completing the necessary work experience so he could add those valuable initials to his business cards.' Alan was working as a financial analyst, a position that any accounting or finance graduate could apply for; for example, the colleague in the cubicle next to Alan was an undergraduate finance major who had been hired directly into the position he currently held (very similar to Alan's). Alan was a little more experienced than this colleague because Alan was the veteran of a training program and was in his fourth position at the company. One of the tasks Alan performed in his role as financial analyst was to provide cost accounting support for new product proposals, like the PCS project. development, Keith did not take a vacation. During the project-approval process, Keith spent a few days at the beach with his wife and children, but he seemed to leave the office and take the vacation reluctantly. While on his short vacation, Keith stayed in contact with the rest of the team, including Alan, via email and text. Alan thought Keith acted as though he had staked his career on the success of this project. Maybe he had; he seemed almost fanatical that MTP should be in this business. Because Green Engines was no longer going to supply CD catalogs for free, Keith considered this a rare opportunity to develop a strong foothold in what was effectively going to be a new market. The two other PCS team members that Alan interacted with were Jane and John; they were technically capable systems engineers who helped Keith. Like Keith, they had helped develop the software and technology for the PCS project; they were currently helping complete the project's development and get the project approved by the upper management review team. After project approval, Jane and John would assist with the maintenance of the PCS software and provide technical support to dealers who purchase the product. Then there was Alan, the financial analyst, who was recently added to the team to provide accounting and finance support for the project-approval process. Alan's duty as a financial analyst was to serve the Operations Division of MTP, Inc., of which Keith was a part. Alan's responsibilities included preparing annual budgets, monthly outlooks, variance analysis, and other special projects for the Operations Division manager. Alan was also responsible for providing revenue and cost summaries for new business proposals like Keith'sin short, "costing" a project proposal. Alan was assigned to the development team by Howard, Alan's supervisor. Howard was a tall, quiet-spoken man, perhaps seven years older than Alan. Like Alan, Howard had been hired by MTP right after college. Alan and Howard had a good relationship, perhaps in part because they both were graduates of the same corporate training program for accounting and finance professionals. Howard respected Alan and the work he performed on behalf of the operating division both of them supported. Alan recalls that the approval-process for the PCS project lasted many weeks and, on a number of occasions, involved late nights at work, particularly on those days when Alan was asked to revise the analysis after 4 p.m. (an effort that THE DEVELOPMENT TEAM FOR THE PCS PROJECT The PCS development team was a cross-functional group comprised of a number of individuals. Alan's primary source of information was Keith, the champion of the PCS project. Keith's education background was in programming and software development. Keith had been part of the PCS development team from its inception, which means that he participated in the two-year-long effort to develop the software and technology required to make PCS successful. Keith was energetic, charismatic, intelligent, and hard-working. For example, during those two years of typically required several hours of work). Keith, however, was a charismatic individual and clearly communicated his appreciation for Alan's efforts on behalf of the team. Alan remembers one night, in particular, toward the end of the project-approval process, when he, Keith, and Jane were leaving the office about midnight, and Keith told Alan: "I would be happy to have you on my team any time." But consistent with the complexities of modem business, Alan functioned simultaneously as a member of two distinct teams. Keith was not Alan's boss and did not give him performance evaluations or raises. Neither did Keith's manager. Rather Alan reported to his own accounting and finance organization management hierarchy. Like many other organizations, businesses, and corporations, the accounting and finance function at MTP had its own hierarchy and reporting structure. Financial analysts reported to a supervisor in the accounting and finance organization (Alan's supervisor was Howard). Accounting and finance supervisors reported to managers in the accounting and finance organization (Alan and Howard's manager was Doug Stevens). Accounting and finance managers reported to the corporation's chief financial officer (CFO). When working late into the night to improve the chance of success of Keith's team's project, it was easy for Alan to forget that he was a member of not only Keith's PCS project team but also Howard's accounting and finance team. Alan found project casting to be one of the most fun and rewarding parts of his job, because he realized that successful and profitable new business proposals like PCS are critical to improving the profitability of any company or corporation. Alan's role in the process was critical Accounting and finance professionals in many organizations are often asked to provide a gatekeeping function where they are expected to ensure that the financial information in business forecasts for new projects is as accurate as possible so that decision- makers can make the best decisions. At the same time, however, the primary source of information about new projects is typically someone outside the accounting and finance organization-like Keith. Alan remembers that at the time of the case, there were roughly 1,000 Green Engines dealers in the United States; most dealers were using the free CD catalogs provided by Green Engines. Based on information the salespeople provided to Keith, they estimated that 20% of all dealers had already subscribed to an online parts catalog product offered by one of PCS's competitors. Additionally, the salespeople and the PCS team expected that 50% of the remaining dealerships would purchase CD catalogs, while the other 50% would subscribe to an online parts catalog from PCS or one of its two other competitors (see Figure 2). Alan incorporated all of this information into the financial forecasts. PCS had advantages over its competitors because MTP's product was better than that of its competitors and because MTP was a subsidiary of Green Engines; its competitors had an advantage over PCS because they had competing products that were already available on the market for purchase and use. Alan knew that other programmers and technical staff had participated in the two-year development of PCS (in addition to Keith, Jane, and John), but those individuals would be moving on to other projects. The development cost of PCS was not included in the analysis prepared by Alan, as those costs had been borne elsewhere (and were economically "sunk" and irrelevant for purposes of the analysis prepared by Alan). Yet once the project was approved, salespeople and additional help desk/support personnel would be added to the team, and the cost of all those individuals were included by Alan in the financial forecast. First, seven salespeople were expected to join the project and would be responsible for selling PCS to Green Motors dealers. The salespeople were, practically, "leftovers" from another dealer-targeted project that was unsuccessful; unfortunately, MTP at the time did not have a good track record for selling products like PCS to Green Engines' dealers. Second, three additional help desk/support employees would also be added to the team to assist and support Jane, John, and Keith. Alan had previously prepared financial forecasts for a number of other project proposals and knew that a financial forecast was comprised of many lines of information. Typically, the first portions of the forecast prepared were the income statement and balance sheet, which included expected revenues, expected expenses, and expected acquisition of assets for the proposed project. The cash flow effects, and a number of performance measures such as ROI (return on investment) and NPV (net present value), were then calculated based on those inputs. THE FINANCIAL FORECAST, PREPARED BY ALAN Alan prepared the five-year financial accounting forecasts used by the upper management review committee to make a decision about whether or not to approve and fund the project, using the information provided by Keith. See Figure 1 for a visual summary of the major actors the PCS project team was interacting with during this project. The information items that Alan used to prepare the financial forecast for PCS are presented in Figure 3, in the format of an income statement. It is important to remember that Alan included only relevant costs in the analysis; that is, only new revenues and costs that would be created and incurred by the proposed project were included in the forecast. Based on the forecast prepared by Alan, the upper management review committee approved the project, the sales force and additional help desk/support personnel were brought on board, and the team went about the business of selling PCS to as many dealers as possible before the end of the year. UNEXPECTED TWISTS AS EVENTS CONTINUED a result, the project was almost immediately less profitable than had been projected. With the benefit of hindsight, it is reasonable to expect that when a major new competitor enters a market that market prices will adjust, but such an expectation was not incorporated into the forecast. The third and final unexpected twist was that international sales, not included in the original forecast, were substantial and improved the project's profitability. Green Engines' sales were primarily in the United States with the vast majority of its dealers located in the continental United States. Therefore, little thought was given to international sales in the original forecast. A few international dealers existed, however, and some of them were big (as in, they were among the largest dealers in the world). Many of those dealers chose to subscribe to not just one PCS but to five or six of them to use in multiple locations at the dealer's large facility. THE ACTORS The first unexpected twist was leamed very shortly after the PCS project's approval: there was a significant missing "part" to the analysis prepared by Alan that should have been included in the original project forecast. The dollar value of the missing information was large enough that it, by itself, required approval by the upper management review committee. Please note that approval by the upper management review committee was required to receive funding for new project expenditures in excess of a threshold amount of US$100,000. Errors in the forecast did not require approval (although the project manager could be expected to be held responsible for a project's success or failure); rather upper management approval was required because new (additional) expenditures were being requested that were not included in the original forecast, and they exceeded the approval threshold. Alan prepared the updated the forecast, which was then formally approved by the upper management review committee. Yet the rumor mill and Alan's performance evaluation conversation with Doug Stevens suggested that upper management review committee members were not amused that this information was not included in the original project proposal; Alan would point out that neither did the committee members notice the missing information (and could have noticed and questioned it just as easily as Howard or Alan). Because the original project proposal was not memorably profitable, it was unclear how such information might have changed the original decision; that is, it was possible that the upper management review committee might have rejected the project if all relevant financial information had been included in the original financial forecast. The second unexpected twist was that as soon as PCS officially entered the market, "market" prices fell dramatically because competitors lowered their prices. As There are three main actors in this story who, in some combination, were responsible for the missing "part" of the financial forecast The forecast was prepared by Alan. As we learned in the opening paragraphs, the project was a black mark on his following performance evaluation Haward was Alan's supervisor at the time of the case, and he received a demotion (from supervisor to senior financial analyst) in large part because of his role in this tale. Howard did not prepare the forecast and trusted Alan's competency, but perhaps he could have asked more critical questions when he reviewed and approved Alan's work. Keith was the project champion; he remained on the team and continued to champion and lead the project, suffering no ill effects of the project-approval process snafus. Keith was determined to ensure that the PCS project occurred. Therefore, with the benefit of hindsight, it seems reasonable to conjecture that Keith may have been willing to "stretch" the prospective financial numbers a bit to ensure the approval of the project, or maybe he "forgot to tell Alan about...some parts. Alan thinks this may very well have securred. He remembers that he asked Keith about the information that later proved "missing" and that Keith claimed those resources would be transferred to the project from the cost center where the development effort occurred. That transfer clearly did not happen, so the PCS project needed to request additional resources, and a second request for additional funds was made of the upper management review committee. Alan does not know whether Keith genuinely thought the transfer would occur and then it did not, or whether Keith intentionally misled Alan. Alan was inclined to believe that Keith would have been willing to mislead (or outright lie to) him given Keith's emotional and professional investment in the PCS project. Alan continues to claim about the PCS project: "I did my job right." At this point it no longer matter what Alan thinks; but rather what do you think? Do you think Keith lied to Alan, or not? Does your opinion of Alan (and Howard) change depending on whether or not Keith lied