You are the head of the Accounting Department in a medium size company. The company has experienced a decline in sales in the current year and facing a net loss. Near the end of the business year, in an attempt to increase/boost profits, top company executives ask you to initiate and document the shipment of a large portion of company inventory to another company in a distant city.

You are to record the shipment as a sale, even though you know that the other company will return the inventory shortly after the year end.

1. What violation of ethics has occurred?
2. What ethical dilemma do you face- if you agree to the proposed plan?
3. What result might occur if you refuse to go along with the plan?
4. What would you do?
5. Assume it is a public company? Assume it is a private company? Would your response be different?