1
CASE STUDY
ACC 696 3-1 Case Study 2: Franklin Industries Whistleblowing
SNHU
September 10,2022
2
CASE STUDY
1. One of the main ethical values in the case involves the honesty and integrity of Natalie.
When she was aware of the fact that the Accounting Department Manager was involved in
alleged embezzlement, she decided to raise her voice against the matter by intimating Stuart
Masters, the controller. To ensure transparency and justice, she informed the internal auditors
about the situation so that a thorough investigation could be conducted. In spite of being warned
by Roger, she demonstrated courage and sincerity, and she was not afraid to point out a
wrongdoing that was occurring in Franklin Industries.
In this case, the professional values that have been demonstrated by most of the
professionals except Natalie are highly unethical. Denny King, the Accounting Department
Manager, has been involved in dishonest and fraudulent practices. Even though she reported the
incident to Stuart Master, he failed to take the responsibility to safeguard her for her truthfulness
(Sharma, 2021). As Roger had warned Natalie about taking the matter further, it implies that
values like adherence to law, transparency and accountability were lacking. However, Natalie
was unfazed by the poor professional values that were demonstrated by others, and she focused
on her professional values like integrity, responsibility, courage and truthfulness (Sharma, 2021).
2. In order to do something about the embezzlement, it is vital to point out that the
malpractices and fraudulent financial activities by Denny King could lead to significant financial
losses for the company. By standing against the fraudulent and unethical practices, the board
members would get an opportunity to take a fair stance on the issue instead of merely supporting
the unjustified views of the CEO.
o The elements that are at stake for the key parties include the reputation of the
organization, the existence of ethical and professional practices and the proactive role that the
management plays in handling the problem.
3
CASE STUDY
o The main levers that can be used for the purpose of influencing those who disagree with
taking action against the embezzlement include the opportunity to streamline the existing
accounting and financial practices by taking action against King and boosting the morale of the
staff to adopt ethical and professional behavior. It will also create an opportunity for the
management to set an example for the managers and subordinates so that they can carry out their
functions in the organization with honesty and integrity. By addressing the embezzlement
scenario effectively, it will be possible to showcase that an ethical culture is in place that
supports and encourages employees to act ethically and responsibly.
o The most powerful and persuasive response that can be made by Natalie revolves around
the immense financial damage that can be caused to the organization as a result of the
embezzlement by the Accounting Department Manager. The argument should be made to the
CEO, who also serves as the chair of the board. He must be persuaded to take action so that
similar kinds of situations can be avoided in the future, which can ultimately strengthen the
financial position and performance of the organization. After the meeting, Natalie must talk with
the CEO and present her views so that he can understand its seriousness and take a morally
responsible and ethical decision.
3. In case all the available options within Franklin Industries have been lost, then Natalie
must file a complaint with the SEC under the Sarbanes-Oxley (SOX) Act. By taking such an
action, it will be possible to safeguard the investors of the organization from fraudulent financial
reporting practices (Legal Information Institute, 2021). Similarly, the Dodd-Frank Wall Street
Reform and Consumer Protection Act can also be considered. The act has been introduced for
the purpose of preventing future financial crises and supporting transparency and accountability
in the financial systems Both the laws can play a key role in ensuring that ethical and responsible
financial practices are promoted in the organizational setting, and stringent action is taken in the
case of the embezzlement occurrence.
4
CASE STUDY
References
Sharma, S. (2021). Professional Values and Ethics: Challenges, Solutions and Different
Dimension. In Advances in Manufacturing and Industrial Engineering (pp. 721-727).
Springer, Singapore.
Legal Information Institute. (2021). Sarbanes-Oxley act. Legal Information Institute. Retrieved
September 7, 2022, from https://www.law.cornell.edu/wex/sarbanes-oxley_act
