You are chief financial officer of Camp Industries. Camp is the defendant in a $44 million class-action suit. The companys legal counsel informally advises you that chances are remote that the company will emerge victorious in the lawsuit. Counsel feels the company will probably lose $30 million. You recall that a loss contingency should be accrued if a loss is probable and the amount can reasonably be estimated. A colleague points out that, in practice, accrual of a loss contingency for unsettled litigation is rare. After all, disclosure that management feels it is probable that the company will lose a specified dollar amount would be welcome ammunition for the opposing legal counsel. He suggests that a loss not be recorded until after the ultimate settlement has been reached. What do you think? Please answer the following questions:

What are the facts of this situation?

Who are the stakeholders?

What are the ethical questions and how to do they apply to the stakeholders?

Based on your personal and business values, what would you do?