You are studying ethical theories. If the ethical theories were full-proof or shall we say, always resulted in an effective decision everyone could live with, ethical decision-making frameworks/models would be unnecessary. For those times when ethical theories are insufficient for decision-making purposes, KPMG developed the Ethical Decision-Making Process, which they refer to as CARE². The "2" refers to using the same four letters: C-A-R-E before a decision is made and before any action commences. The graphic below, created by KPMG, summarizes the process of making ethical decisions.

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?

CASE

For the past year, Valerie an audit associate has been working on public engagement for a major retail company. Although the client's personnel are cooperative and professional, the audit has be challenging because of employees turnover and recent software system installation. This new software affect both the account receivables and account payable processes.

During Valerie's review of the AP cycle, She uncover a material mistake by Jenny, A new AP clerk Valerie tell jenny that both her AP Manager and the audit supervisor will be informed of her discovery, Jenny begins cry and begs Valerie to not say anything to the AP Manager or audit supervisor foe fear that she will lose her job, jenny confides in Valerie's that her husband recently lost his job and they have two children with special needs , jenny tell Valerie that she has already been warned about s different error she made last month and as a new employee she will likely be fired as a result of this additional mistake, jenny promise Valerie she will fix the error and she will provide proof of the correction Valerie is considering letting.

Valerie is considering letting Jenny make the appropriate adjustment without informing anyone else about the mistake.

What should Valerie do?