ASSIGNMENT: FULLY APPLYING A DECISION-MAKING 1

Assignment: Fully Applying a Decision-Making Framework

Karen Cordner

ACC/260

April 10, 2011

Peggy January
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Assignment: Fully Applying a Decision-Making Framework

Locker room or water cooler talk abounds in most businesses. The discussions can vary

broadly from topics regarding the latest saga on a television drama to intimate details about

coworkers, clients, and customers. Clearly, television drama most likely will not play a role in an

ethical dilemma of a professional business person. However, because intimate relationships

between clients and people working for them occur with some regularity; such discussions can

create an ethical dilemma. The ethical solution is not always clear.

One such occurrence is a case involving the Certified Public Accountant (CPA), Albert

Gable, his clients Larry and Susan Wilson, and a loan officer at local bank; where Albert was

performing an audit of random loan files. The audit of random loan files happens to include the

personal loan file of Larry and Susan. At first blush, this does not appear to be anything more

than business as usual for these stakeholders. The ethical dilemma begins for Albert when

preparing a financial plan for Larry and Susan he becomes personal friends them while working

with the city's largest bank performing the random audits. The random audit includes a loan file

of Larry and Susan Wilson.

The loan file reveals inconsistencies with the information Albert personally knows about

Larry and Susan from preparing their financial plan and his friendship with them. Without

revealing his relationship with Larry and Susan, Albert chooses to discuss Larry and Susan's loan

with a loan officer at the bank. Not surprising, in a small city of 65,000, the loan officer is also

friends with Larry Wilson. The loan officer and Larry frequently golf together. The loan officer

reveals personal information regarding the relationship between Larry and Susan. The loan

officer prefaces his comments by cautioning Larry to keep the information confidential. The loan

officer reveals that Larry is planning his business affairs in such a way so he can divorce and

"leave his wife penniless" (Brooks, 2007, p. 284).

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Of the five people involved in the scenario, the stakeholder facing a major ethical

dilemma is, without a doubt, Albert Gable. Albert is facing a dilemma regarding his professional

and personal ethics. Albert has the information regarding the financial and personal lives of

Larry and Susan Wilson that has chosen to keep to himself. In addition, Albert has a monetary

interest in staying employed as the CPA for Larry and Susan. Albert is looking forward to

receiving a substantial bonus from the work on the financial plan for Larry and Susan. Albert

plans to use the extra money to contribute to his daughter's continuing education.

The secondary stakeholders are Larry and Susan, the loan officer, and indirectly Albert's

daughter. How Albert chooses to address his ethical dilemma can affect each of these

stakeholders in varying degrees.

Should Albert choose to reveal the financial inconsistencies known to him because of his

relationship with Susan and Larry to the loan officer, he faces the possibility of losing their

friendship, trust, and business. The loan officer may use the information to reevaluate the

Wilson's loan file and depending and the details of the loan he may recall it. Losing Susan and

Larry's business affects Albert monetarily, and he cannot contribute to his daughter's education.

Albert is in a position in which he can choice to do the right thing or because of his

relationship with the Wilsons and possibility of losing the bonus, taking an unethical stance of

staying silent. As a professional accountant Albert has a responsibility to protect the public

interest while protecting the credibility of the profession. Albert has an obligation to perform at a

higher standard of ethical behavior than nonprofessionals.

At the onset Albert should have withdrawn from reviewing the loan file of Susan and

Larry Wilson to avoid any semblance of partiality or bias. Certainly, the bank could have pulled
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another loan file for Albert to review. However, because Albert chose to keep silent he faces a

bigger dilemma.

Ignoring the "locker room talk" Albert must still must be the consummate professional.

As a professional accountant, one of the fundamental principles he must adhere to is

confidentiality. Although he may not reveal the financial inconsistencies, from the information in

the financial plan of Susan and Larry Wilson to the loan officer, as a professional, Albert has the

dubious responsibility to look past his own monetary rewards and be cognizant of the obligations

of his profession. Albert must recuse himself with working with Susan and Larry and remove

himself from giving an opinion on their bank loan. By not doing so he is involving himself in

misrepresentation and possibly illegal behavior.

Locker room and water cooler talk is never going to cease. However, professionals must

learn to discern gossip from reality. One could consider the information from the loan officer as

gossip. This gossip seems to have little bearing on Albert's dilemma. Albert's dilemma occurs as

he continues to work on Susan and Larry's financial plan while working for the bank on the audit

of their loan. The virtuous, ethical decision could affect Albert monetarily in addition to severing

his friendship with Susan and Larry. True, Albert may lose his bonus; however, by not acting as

a virtuous professional he could lose much more than money. Albert could face losing his

professional status.
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Reference

Brooks, L. J. (2007). Business and Professional Ethics for Directors, Executives and

Accountants (4th ed.). Mason, OH: Thompson/South-Western.