Presented below is abbreviated testimony from Troy Normand in the WorldCom case. He was a manager in the corporate reporting department and is one of five individuals who pleaded guilty. He is testifying in hopes of receiving no prison time when he is ultimately sentenced.

	Q. Mr. Normand, if you could just describe for the jury how the meeting started and what was said during the meeting?
	A. I can't recall exactly who initiated the discussion, but right away Scott Sullivan acknowledged that he was aware we had problems with the entries, David Myers had informed him, and we were considering resigning.

He said that he respected our concerns but that we weren't being asked to do anything that he believed was wrong. He mentioned that he acknowledged that the company had lost focus quite a bit due to the preparations for the Sprint merger, and that he was putting plans in place and projects in place to try to determine where the problems were, why the costs were so high.

He did say he believed that the initial statements that we produced, that the line costs in those statements could not have been as high as they were, that he believed something was wrong and there was no way that the costs were that high.

I informed him that I didn't believe the entry we were being asked to do was right, that I was scared, and I didn't want to put myself in a position of going to jail for him or the company. He responded that he didn't believe anything was wrong, nobody was going to be going to jail, but that if it later was found to be wrong, that he would be the person going to jail, not me.

He asked that I stay, don't jump off the plane, let him land it softly, that's basically how he put it. And he mentioned that he had a discussion with Bernie Ebbers, asking Bernie to reduce projections going forward and that Bernie had refused.

	Q. Mr. Normand, you said that Mr. Sullivan said something about don't jump out of the plane. What did you understand him to mean when he said that?
	A. Not to quit.
	Q. During this meeting, did Mr. Sullivan say anything about whether you would be asked to make entries like this in the future?
	A. Yes, he made a comment that from that point going forward we wouldn't be asked to record any entries, high-level late adjustments, that the numbers would be the numbers.
	Q. What did you understand that to be mean, the numbers would be the numbers?
	A. That after the preliminary statements were issued, with the exception of any normal transaction, valid transaction, we wouldn't be asked to be recording any more late entries.
	Q. I believe you testified that Mr. Sullivan said something about the line cost numbers not being accurate. Did he ask you to conduct any analysis to determine whether the line cost numbers were accurate?
	A. No, he did not.
	Q. Did anyone ever ask you to do that?
	A. No.
	Q. Did you ever conduct any such analysis?
	A. No, I didn't.
	Q. During this meeting, did Mr. Sullivan ever provide any accounting justification for the entry you were asked to make?
	A. No, he did not.
	Q. Did anything else happen during the meeting?
	A. I don't recall anything else.
	Q. How did you feel after this meeting?
	A. Not much better actually. I left his office not convinced in any way that what we were asked to do was right. However, I did question myself to some degree after talking with him wondering whether I was making something more out of what was really there.

Required:

The primary objective of financial reporting is to provide useful information for decision making. Specifically, financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions. Furthermore, it should provide information to help present and potential users to assess the amounts, timing, and uncertainty of prospective cash flows. Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and the effects of transactions, events, and circumstances that cause changes in resources and claims to those resources. However, accounting information quality may be compromised due to management manipulation.

The focus of this case is to identify the ethical issue faced by Troy Normand. Assume that you are in charge of preparing memorandums related to business ethics issues at Titan Company. Your mission is to identify the ethical issue faced by Troy Normand in the WorldCom case and recommend employees at Titan Company the best course of actions if they were in Mr. Normands shoes using a company internal memo. Address the following questions in your memo to All Employees.

What appears to be the ethical issue involved in this case?

Is Troy Normand acting improperly or immorally?

What could have Troy Normand done differently? Identify alternative courses of action to the ethical issue and possible trade-offs.

Who are the major stakeholders affected by Troy Normands action in this case? Discuss also how the major stakeholders would be affected by the alternative courses of action.

What is the best course of action to this ethical issue recommended by you to employees at Titan Company?

I mainly want to know some possible solutions and tradeoffs I can use for this case?