Imagine you are the controller of Apex Corporation, a troubled company, whose one hope is a possible acquisition by Fire Corporation of America (FCA). Here is the background. Apex is a telecommunications company and is in serious trouble with less than six months of cash left and liabilities mounting. FCA is completing the final stages of its due diligence to acquire 100 percent of the stock of Apex and infuse $30 million in cash to keep the operations going. Surprisingly enough, FCA is very bullish on the prospects for Apex and seems ready to move ahead with the transaction and save Apex from certain bankruptcy. There is only one problem: FCAs consultants, Implus Partners, prepared and submitted pro forma financial projections to FCA based on information your boss provided to them . . . and you believe the revenues to be overstated. Something seems wrong. You remember your boss telling you and the other staff that should the acquisition go through, FCA would keep everyone at Apex on the staff. We must make the best possible impression on FCA, she said. Be optimistic, friendly, and supportive over the next few weeks. This is our last chance to avoid bankruptcy and save our jobs. Prompt: Use the EDM Model and determine what you should do as the controller. Discuss AICPA Codes that are violated or that should be applied. You may also discuss ethical foundations (Teleology, Deontology, etc.) as appropriate.

Ethical Decision-Making Model Step 1: Recognize the issue Step 2: Gather the critical facts Step 3: Identify the stakeholders Step 4: Evaluate the alternatives Step 5: Consider the effects of each alternative to each stakeholder Step 6: Consider the rules, regulations and laws Step 7: Make your decision Step 8: Document your efforts Step 9: Evaluate the outcome