Learning Activity 3.5: Ethics and corporate social responsibility

You are three-quarters of the way through this course. This is an Assessment of Learning, which is used to evaluate your work based on established criteria and to assign a mark. Your teacher will provide you with feedback and a mark. This Assessment of Learning is worth 17% of your final mark for the course.

There are two tasks in this Assessment of Learning.

Instructions

Task 1: Questions regarding a corporate accounting scandal

Businesses listed on the stock exchange are required to make public a set of signed audited financial statements. At the same time, management knows that the better their financial results look, the higher the share price will be and, consequently, the happier the shareholders will be. However, this can lead to conflicts of interest, as was the case with Livent Inc. and their auditors, in the following example describing an ethical issue. Read about it now in the document Livent and the auditors

(Opens in new window)

, and then answer the questions that follow.

Questions:

a) Determine the facts of the situation.

• Livent was involved in
• Livent transferred pre-production costs for shows to
• Livent removed certain expenses and corresponding liabilities from the accounting records at the end of each quarter to
• Livent transferred costs from a currently running show to
• b) Identify the primary ethical issues.
• The accounting records were
• Senior management was

c) Name at least two of the stakeholders that the fraud affected.

Task 2: Report on a corporate accounting scandal you have researched

• Your job is to research a famous corporate scandal, an issue dealing with corporate social responsibility, or an ethical issue of a corporate nature, and report on your findings using PowerPoint or any sharable presentation method. (You will choose one topic from the list on the next page.) Your report/presentation should be engaging and may include video clips, links to websites, and so on.

Questions:

Your report should contain the following seven items of information, which form the basis for solving ethical dilemmas:

1. Determine the facts of the situation. (Background information about the company or issue in question)
2. Identify the ethical circumstances. (Describe the scandal, the issues, and the important stakeholders)
3. Identify the values related to the situation. Find out what the responsibilities and obligations were for everyone involved.
4. Identify the action taken and the consequences of those actions. How did those actions affect the company and/or the industry?
5. Specify the alternative courses of action that could have been taken and evaluate them, applying your personal code of ethics or your organizations code of ethics to the situation.
6. Describe the consequences of the alternative courses of action you specified
7. If you were personally involved in this case/issue, what decision would you have made and what action would you have taken? Choose one of the alternative courses of action you identified and explain why you chose this one to deal with the situation.

Topics

Here is a list of some famous scandals or issues involving corporate social responsibility and ethics. Choose one topic from this list.

• Bernie Madoff Ponzi scheme
• Bre-X falsified mineral discovery
• Compass Group bribed the United Nations to get business
• Conrad Black hidden executive compensation in the range of $200 million
• Enron directors and executives fraudulently concealed large losses in Enrons projects
• Exxon over-reporting oil reserves
• Fannie Mae under-reporting profit
• Halliburton Company overcharging on government contracts
• Lance Armstrong doping charges
• Maple Leaf Foods Listeria outbreak
• Martha Stewart insider trading
• Nike sweatshops
• Nortel accounting irregularities
• Parmalat SpA questionable accounting practices
• Scott Thompson Yahoo executive lies about his credentials
• Swissair miscalculated expansion
• Tyco International executives steal from company
• WorldCom (now MCI, Inc.) misrepresented profits
• Xerox alleged accounting irregularities involving auditor KPMG
• Any other accounting scandal that relates to corporate responsibility and ethical behaviour.