Reference no: EM132305849

Correro Candy Company is an international distributor of sweet treats. The manufacturing plant is located in rural Colorado. Recently, Correro began a major expansion that will more than triple its capacity. As a result of the expansion Correro began hiring new staff to meet the increased needs and demands. Burges recently accepted the position of Distribution Supervisor. David, the manager who hired Burges, is also his new supervisor. David’s candid responses and clearly articulated expectations were factors that contributed to Burges’ decision to accept the position. Burges moved from Texas and thus far has enjoyed the community, his new colleagues and his new position. He is developing a sound relationship with his subordinates and vendors. The position is challenging, exactly as Burges expected. In a short period of time, he is making a significant contribution to the company’s new expansion. During his move from Texas, the movers damaged an expensive piece of furniture. Correro paid his moving costs, but the cost of the damaged furniture must be covered by the moving company. When Burges filed the claim with the moving company, he was told that they would only pay based on the weight of the damaged item, not the value of the item. The proposed amount was significantly less than the value of the damaged furniture. Burges lamented about his moving woes with his new boss, David. Unfortunately, neither David nor the company can influence the moving company to compensate Burges for the value of the furniture. David tells Burges to pad his next few expense reports to cover the cost of the damaged furniture. David explains that the accounting department does not require receipts for expenses less than $100. If Burges includes several “miscellaneous” expense items valued at $100 or less in his next few expense reports, then the cost of the damaged furniture will be covered. Burges is surprised at David’s suggestion. The other interactions with David all seemed to indicate that he had strong ethical standards. Burges is contemplating what he should do.

1. What ethical dilemma does the accountant face?

2. What business problem(s) does the company have?

3. Who are the potential stakeholders and how might they be affected by the decision of the accountant?

4. What choices does the accountant have? Evaluate the choices, i.e. who benefits or who is hurt by the choice(s).

5. What action would you recommend, i.e. how do you believe the business problem should be resolved? How should the ethical dilemma be resolved?

6. Going forward, what should the company do regarding organizational ethics?