Ethical Dilemma 4, Essay Example

The stakeholders in this case are the company’s management, employees, investors, the society, and the government. The management is a stakeholder because management compensation and performance appraisal is tied to the company’s financial performance. Employees are stakeholders because they are part of the organization and may pay the price if accounting irregularity is discovered. Investors have a right to get accurate information because they base their investment decisions on the accounting information. The society has an interest in ensuring that the organizations present accurate information and the markets continue to function effectively. The government has an interest because the tax receipts are affected by accounting information and in addition, the government also has an interest in maintaining public confidence in the economic system and financial markets.

The president’s request poses an ethical dilemma for the controller. The president is above the controller in the organizational hierarchy, thus, controller is obliged to follow president’s orders. But at the same time, the controller also has professional and ethical obligation to ensure that the company presents its accounting information as accurately as possible and all accounting assumptions are made with the best possible intent. If controller follows the president’s recommendation, he will be intentionally misleading the investors and the markets.

The controller should not be concerned with Gomez Corporation’s growth rate in estimating the allowance because the intent of accounting rules is to present financial information as accurately as possible and the management should use its best intentions in making assumptions. Manipulating accounting information to reach a particular financial goal will be misrepresentation of the real facts and will be nothing less than deception.