Analysis Paper

Section I

In the case Truth or Consequences, there are a variety of ethical dilemmas that come up, and the individuals involved also have to make decisions based on an analysis of ethical decisions in business against the advantages that could accrue from choosing to ignore the ethical issues in play. The first person who is integral in the case is Will, who is the senior in-charge of the audit of Minter Metroplex, a client of their company, an audit firm. Will has discovered that the recent audit report omitted a large sum of money which had a spitball effect on how the client made decisions based on the audit report. The other individual who is integral in the case is Jess, the controller of Minter Metroplex and thus, central to the accounting issue at hand. Will and Jess had dated, and this presents an ethical dilemma for Will as he debates whether to report the underreporting of the audit report to the management of Minter Metroplex. Jess also has to decide whether disclosing the information to her seniors will harm her and the overall company. Jess will bear the brunt of the error if she decides to report to her seniors as she might end up losing her job and consequently, tamper with her career and prospects in accounting. In the end, Will can decide to take up the matter with Minter’s executives, and in so doing, it will affect Jess and her staff who did the auditing. Jess, on the other hand, can decide to follow Will’s advise and forget about Jess’s staff that got fired and the decision that the company decided not to buy land for expansion.

In this manner, the stakeholders in the decision are Will and Jess. The whole dilemma rests on the choices they make as they are the only people who know what is happening.

In the above analysis, the most ethical decision would be for Jess to report the error. It has a net of two positives and thus, is the most ethical.

Section II

Ethics in accounting concerns a distinction of what is bad from what is good. Every time a professional makes a decision, the two ends of the spectrum are often put into consideration, and thus, ethics is an important component of professional practice. In the case of Will and Jess, some of the ethical concepts that come in handy in making the decision are discussed in the succeeding paragraphs.

Utilitarianism

Utilitarianism is a concept that focuses on maximisation of the overall good of others as well as the individual who is deciding on behalf of the others. The ideas of good are however the factors that come in play when deciding what constitutes as good and right for the overall people or groups of people who will be affected by the decision made (Chin 3). As such, maximum good stems from the decision resulting in matters that are pleasurable or bring happiness. As such, utilitarianism advocates for making decisions that bring the most pleasure or happiness to a large number of people involved. In the case of Will and Jess, several factors come into play in using utilitarianism as an ethical concept. For one, if Jess decides to report the understatement of the funds, it will lead to worse consequences for the company as it will end up not expanding in the next fiscal year for fear of making losses. Secondly, if she decides to report the error, she will end up losing her job, and thus, it will not lead to happiness or pleasure for her or the executives who have to lose her. Thirdly, Will might end up losing his friend if he decides to report the issue to Minter executives and this will not lead to happiness or pleasure on all the parties involved. Fourthly, if Will decides to help Jess to work out the dilemma, they might end up becoming good friends, and their relationship may have a chance at starting again, and this will certainly bring happiness to Will.

Profit Maximization

The businesses that operate in the contemporary world and space have a variety of ethical and business principles which guide factors like profitability. The issue of profitability and ethics is especially contentious as sometimes; a business entity can maximise on profits by skimping on ethical principles. The concept of profit maximisation advocates for choosing a path or making decisions that will enable a business entity to make the most profit (Agwili & Ali 1). For a business, however, the idea of making a profit comes from a variety of factors which include the costs of running the various operations versus the revenue that the company earns. As such, to make the most profit, a business entity has to reduce the costs of running the business and in so doing, achieve the most profitability in operation. In the case of Will and Jess, the cover-up will lead to the company recording lower profit margins as the audit failed to show a large amount of money which the company made in the previous fiscal year. If Jess decides not to report the matter, the company will fail to realise their profit margins, and this will reflect negatively on the stakeholders of Mintex Metroplex. As such, based on the concept of profit maximisation, Jess should report the error in the audit that failed to include the large sum of money which is highlighted in the final reports, will place the company’s profit margins in good standing with all the stakeholders. Therefore, based on the ethical principle of profit maximisation, Jess should report the error, and in so doing, the real profit margins will be realised in the company.

Universalism

Universalism, as an ethical concept, advocates for a universal ethical principle where all people in the business world or any other entity have to abide by the set rules regardless of the differences that make them distinct (Tweedie 51). As such, the concept of universalism transcends the issues of culture, race, entitlement or any other factor that a person may use to skimp on pertinent issues in a business environment. With regards to this ethical principle, Jess should do the right thing which reports the actual results of the audit even if in doing so, she will acknowledge her errors and be liable for dismissal from her position.

Section III

The previous section captured the various ethical concepts that are instrumental in the decision making of the involved parties in the case. Basing on the concept of utilitarianism, I would choose Will’s option of reporting the misnomer as part of something that the company managers will not question. The reason for this is that they will be elated over the new profit margins and thus, will lead to the company implementing the decisions that they were hoping to do. One of these decisions is acquiring the parcel of land that they were looking into as it will lead to expansion and consequently, lead to more hires in the future. In this case, there will be happiness in the company as the stakeholders will be elated to learn of their profit margins.

Profit maximisation is the other important concept that is of significance in the analysis. As per the concept, Jess should report the findings of the audit and in so doing, highlight her mistakes. The aim of doing so will be to enable the company know that it made a huge profit and thus, implement the decisions that it was looking into doing. To go about it, however, I would use Will’s suggestions where I will not report of the error that led to the poor results. The reporting will aim to show the most profits made and in so doing, will only point out the error of the markets and adjust the profits accordingly.

The final concept of universalism advocates for a practice of ethical principles at all times. In this regard, coming forward and explaining what happened would be the best option regardless of the consequences that Jess will face.

Conclusion

In the end, I would choose Will’s suggestion as it will not only enable me to retain my job, but it will also have an overall good impact on the employees of the company. Soon, when the company expands, I would vouch for the assistants let off after the initial report came out. In so doing, everyone in the fiasco would have achieved a win and be satisfied with the outcome.

Works Cited

Agwili, Ahmed, and Ali Gerged. "How Corporate Governance affect Firm Value and profitability Evidence from Saudi Financial and Non-Financial Listed Firms." International Journal of Business Governance and Ethics, vol. 14, no. 3, 2020, p. 1.

Chin, Jacqueline J. "Moral Relativism vs Universalism." Encyclopedia of Global Bioethics, 2015, pp. 1-11.

Tweedie, Dale. "After Habermas: Applying Axel Honneth’s critical theory in accounting research." Critical Perspectives on Accounting, vol. 57, 2018, pp. 39-55.