You are a staff accountant with Munson-Libra Industries, a multinational company that manufactured and sold orthopedic devices.After the fiscal year-end, you are working with the controller to prepare the geographic disclosures.Yesterday you presented the controller with the following summary information:

($ in millions)

DomesticLibyaEgyptFranceCayman IslandsTotal

Revenues$845$222$265$343$2,311$3,986

Operating Income145768821642972

Assets1,005301290382851,919

Today, you find the following memo on your desk:Well Done!Let's combine the data like this:

($ in millions)

DomesticAfricaEurope & Other ForeignTotal

Revenues$845$487$2,654 $3,986

Operating Income145164663972

Assets1,0055913231,919

Because of political instability in North Africa, let's not disclose specific countries.In addition, we restructured most of our French sales and some of our U.S. sales to occur through our offices in the Cayman Islands.This allows us to avoid paying higher taxes in those countries.The Cayman Islands has a 0% corporate income tax rate.We don't want to highlight our ability to shift profits to avoid taxes.

Analytical Model for Ethical Decisions. Ethical codes are informative and helpful, but motivation to behave ethically must come from within oneself and not just from the fear of penalties for violating professional codes. Presented below is a sequence of steps that provide a framework for analyzing ethical issues. These steps can help youapply your own sense of right and wrong to ethical dilemmas.

Requirement: Analyze the ethical dilemma presented above using the steps below.

Step 1. Determine the facts of the situation. This involves determining the who, what, where, when and how.

Step 2. Identify the ethical issue and the stakeholders.

Step 3. Identify the values related to the situation.

Step 4. Specify the alternative courses of action.

Step 5. Evaluate the courses of action in terms of their consistency with the values identified in step 3.

Step 6. Identify the consequences of each possible course of action.

Step 7. Make your decision.

The analytical steps outlined above provide a framework you can use to evaluate ethical situations like this.