Question
Ms. Louie is the President of VL Corporation, a luxury handbag company whose stock is traded on a national exchange. In a meeting with investment
Ms. Louie is the President of VL Corporation, a luxury handbag company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Ms. Louie had predicted that the companys earnings would grow by 25% this year. Unfortunately, sales have been less than expected during the fourth quarter of the year, and Ms. Louie concluded within two weeks of the end of the fiscal year that it would be impossible to report an increase in earnings at the end of the year as large as predicted unless some drastic action was taken. She did some calculations and realized that if she could convince the accounting department to utilize another costing method to calculate costs during the fourth fiscal quarter of the year, net earnings would look better, and the company would be able to meet its projected earnings for the year. She figured the company could go back to the costing method they used historically to account for costs in the new year, and no one would ever know the change was made. Now if she could only convince all parties involvedShe thought, That wont be so hard. They want fourth-quarter bonuses as much as I do!
Do you believe Ms. Louies actions are ethical? Briefly describe why or why not?
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