Susan Spiffy, owner of Spiffy Cleaners, a drive-through dry cleaners, would like to expand her business from its current location to a chain of cleaners. Revenues at the one location have been increasing an average of 8% each quarter. Profits have been increasing accordingly. Susan is conservative in spending and is a very hard worker. She has an appointment with a banker to apply for a loan to expand the business. To prepare for the appointment, she instructs you, as chief financial officer and payroll clerk, to copy the quarterly income statements for the past two years but not to include a balance sheet. Susan already has a substantial loan from another bank. In fact, she has very little of her own money invested in the business.
Required
Use the Ethical Decision Framework in Exhibit 1-9 to complete the following requirements:
1. Recognize an ethical dilemma: What ethical dilemma(s) do you face?
2. Analyze the key elements in the situation:
a. Who may benefit if you follow Susan’s instructions? Who may be harmed?
b. How are they likely to benefit or be harmed?
c. What rights or claims may be violated? d. What specific interests are in conflict?
e. What are your responsibilities and obligations?
3. List alternatives and evaluate the impact of each on those affected: As chief financial officer, what are your options in dealing with the ethical dilemma(s) you identified in (1) above? If the bank does not receive the balance sheet, will it have all the relevant information needed to make a decision on a loan? Why or why not? Will the information provided by your company be neutral?
4. Select the best alternative: Among the alternatives, which one would you select?