In MAA250 you are learning to apply your ethical principles to real‐world problems. In this assignment, you’ll be applying your learning about ethics and ethical decision‐making to a case scenario, as you’ve been doing in the weekly seminars. Coming to an understanding of your own ethical approach and how others have theorized ethics is important for all professionals.

Write your analysis as if you were a financial professional. That means your word choice, the terminology you use, your spelling and punctuation, and the structure of each response must be appropriate for a professional, and well‐informed, audience. This is important to keep in mind as you draft, edit, and proofread your responses.

Specific Requirements

Ethical Dilemma

Malinda is a very self‐motivated person. Long before she graduated from Deakin as an accounting and finance graduate, she had been exploring her career and employment options. She often kept herself updated with the latest information about the accounting and finance industry. Malinda also took every opportunity that she had to speak with numerous industry insiders for their advice and perspectives about the job and industry. She knew that she will be a step closer to her dream job if enough efforts were put in.

Malinda was on top of the world when she managed to land in her dream job as an accountant in a major listed company with global reach. To facilitate her early days in the organization, she was assigned to a mentor at work, Emily. Emily had been with the finance department for many years, and throughout the years she had earned the reputation of being an honest and reliable employee. She even had received numerous awards for her excellent contributions to the company, and is also very well accepted by her superior, Borat, the Chief Finance Officer (CFO).

Malinda and Emily worked very well together. Malinda also picked up bits and pieces of Emily’s story – she had managed to pursue a successful career even through three terms of maternity leave, following the birth of her children. One of them had a learning difficulty. The company supported Emily with time off to manage the demands on her at home. When Malinda told Emily of her father’s long‐term illness, Emily confided that her husband had also been on that path. They bonded very well over the shared adversity and even became best friends.

The sudden and rapid spread of COVID‐19 had plunged the company into an unprecedented and uncharted uncertainty. There was severe economic downturn which meant that business was tough. Demand was slacked locally and globally for several of their leading products while competition from competitors was intense. Profit margins were tight, and shareholders were definitely upset with the performance of the company. In fact, “do your work or leave” was how one angry shareholder addressed the management of the company during its last Annual General Meeting (AGM). A large number of their stocks were held by retirees. There were conversations in the office that the CFO was under immerse pressure to deliver some good news when the mid‐year financial results were to be released next month.

Malinda was tasked to assist Emily and team in preparing the company’s financial statements for the mid‐year financial results announcement. They were almost in the final stage of the report, and all that was needed was some information on capital expense account for the subsidiary companies that were located overseas. Emily personally took responsibility for this.

Late one afternoon, she told Malinda that the total amount of capital spending was $4.8 billion, and upon completing the consolidation they find that the company reported a $1.4 billion profit. Malinda was blown away, but Emily somehow showed little excitement. They then started to compile all the necessary information for a presentation with the CFO on the following day.

The meeting with Borat went well, as he seemed to be very pleased with the financial position of the company. On the way out of the meeting room, Malinda overheard the tail end of a conversation between Borat and Emily. Malinda thought that she heard “…well done Emily…increment and promotion…”

On the following morning, Malinda was called by the CFO to get the accounts of the subsidiary companies since Emily was on medical leave. While Malinda was sorting out the documents, she found that the capital expenditure amount reported by the subsidiaries was significantly different than the one Emily told her. Malinda was surprised and investigated further.

Malinda quickly went into the accounting system, and she identified a large number of the operating expenses entries were reversed in the system. The adjustment resulted in a nearly $60 million reduction in operating expenses, and was a key reason for the company to be in a profitable position. From her accounting lessons, she was aware that moving expenses from operating expense account to capital expense account would delay the full recognition of the expense, which should have been recognised immediately if they would had been in the operating expenses account. Malinda figured out that if the correct figures were plugged in, the company would be at loss.

The following morning, Emily looked pale and shaken. She had gone to the doctor with her husband. The outcome was bad. He was diagnosed with an incurable illness and was told that his health will deteriorate over time. Malinda spent the whole morning supporting and comforting Emily. Malinda thought that it was not the right time to raise her concerns with Emily.

Thus, Malinda raised her concerns with the CFO but was only to be told “it is all good”. Not happy with the response, she pushed for clarification. Borat eventually sighed and opened up.

“OK, Malinda. I will bring you into the circle of trust. Emily’s husband is my brother. He has been sick for some time and the recent COVID‐19 pandemic resulted in him losing his job. The medical bills and the loss of income drastically added the financial burden that Emily has to bear. She already has to face the stress of his medical conditions in addition to the needs of her young children. I could not just sit by and see the financial pressure piled on top of her stress. Her promotion and increment would definitely take off some of the financial pressures that she has”.

Borat then continued, “Let it slide, Malinda. Pursuing this further would only break her. Do you want that on your conscience?”

Based on her ethics training, Malinda was of the view that these activities and expenditures were not in the interest of the different stakeholders of the company. If Malinda were to take some action to bring these issues to light and it turned out that the firm was indeed acted against the policies and regulations, then there could be a risk that the company would face legal actions and even running the possibility of collapsing.

With justification, use an ethical decision‐making model of your choice taught in this unit to resolve the ethical dilemmas outlined in the case above, where you must take the perspective of Malinda.

In responding to the case, you must do the followings:

1. Outline and detail the ethical decision‐making model of your choice (300 words)
2. Justify why you have chosen this model (as opposed to alternate models) as the approach to resolve the ethical dilemma (200 words)
3. Apply the chosen model to the case. (2,000 words)