Reference no: EM131544755

The head of a corporate audit for a major pharmaceutical company discovered that "double books" had been kept on the research for a new drug and the original data showed the drug failing every required test. Following the procedure in the company's own whistle-blowing policy, he submitted a report stating only documented facts. The auditor was summoned to meet with the directors, who offered him a "deal." They promised that if the auditor would keep quiet about the falsification, the company would never market the drug. The auditor agreed and the directors kept their promise. However, corporate policy was changed to prohibit the auditor from having ready access to company records. In addition, individual departments were given the authority to stop internal audits and to review the audit reports before they are submitted. The auditor wonders whether he should have accepted that "deal." 

1. Was the auditor offered a good "deal?" Should he have accepted? What were his alternatives?