Process BEFORE you DECIDE

When confronted with an ethical dilemma and before a decision is made, an individual or group would Consider all facts, Assess alternative actions, Review resources, and Evaluate potential outcomes.

Consider all facts - List the particulars of the situation

Assess alternative actions - Identify the available options

Review resources - Refer to rules and sources of guidance and support

Evaluate potential outcomes - Predict the potential consequences of each decision

Process BEFORE you ACT

After applying the CARE framework to make an ethical decision, test your decision before you ACT.

Consistency - Ask yourself: would I make the same decision if a similar situation arose in the future. Would I want everyone to decide the same way?

Awareness & Accountability - Ask yourself: have I behaved responsibly? Do I feel proud of my decision? How would I feel if my decision was on the front page of tomorrow's newspaper?

Rules & Principles - Does my decision follow FASB, IRS, Auditing, etc. rules/standards? Is my decision logical? If my decision were to become a general principle everyone had to follow, how would I feel?

Equity - Do I treat everyone equally regardless of their unique differences? Would I want to be treated in a similar fashion?

For this week's discussion, please review this file located in Content>Learning Resources>Assessements>Discussions: The Ethical Compass - A toolkit for integrity in business. Apply KPMG's CARE model to analyze the ethical issue below.

For the past year, Valerie, an audit associate, has been working on a public engagement for a major retail company. Although the client's personnel are cooperative and professional, the audit has been challenging because of employee turnover and a recent software system installation. The new software affects both the accounts receivable and accounts payable processes. During Valerie's review of the AP cycle, she uncovers a material mistake by Jenny, a new AP clerk. Valerie tells Jenny that both her AP manager and the audit supervisor will be informed of her discovery. Jenny begins to cry and begs Valerie to not say anything to the AP manager or the audit supervisor for fear that she will lose her job. Jenny confides in Valerie that her husband recently lost his job and they have two children with special needs. Jenny tells Valerie that she has already been warned about a different error she made last month, and as a new employee, she will likely be fired as a result of this additional mistake. Jenny promises Valerie she will fix the error, and she will provide proof of the correction. Valerie is considering letting Jenny make the appropriate adjustments without informing anyone else about the mistake. What should Valerie do?