The tobacco companies have paid billions because of smoking-related illnesses. In particular, Philip Morris, a leading cigarette manufacturer, paid more than $3,000,000,000 in settlement payments in one year.

Requirements: (Part A: 50 points maximum; part B: 50 points maximum)

A. 1. Suppose you are the chief financial officer (CFO) responsible for the financial statements of Philip Morris. Critically analyze the ethical issues you would face as you consider what to report in your companys annual report about the cash payments.

2. Include in your analysis

• the negative consequences to Philip Morris for not telling the truth;
• the negative consequences to Philip Morris for telling the truth; and
• the ethical course of action for you to take in this situation.