Case Study Analysis

Ethics and prof

essional conduct in business

T

he

director of marketing for Starr computer Co,

Sandi

Keller

had the following

discussion with the company controller,

Tyler

Johnson

,

on

July

26, 2014 the

cur

rent year.

Sandi: Tyler it looks like I'm going to spend much less than indicated on my

budget.

Tyler: I'm glad to hear it.

Sandi: well

I’m

not sure it's good news.

I’m

concerned that the president will

see

that

I’m

under budget and reduce my budget in the future.

T

he

only reason that

I

look good is that we

’

ve delayed an advertising campaign.

Once

the campaign hits

in

September,

I’

m sure my actual expenditures will go up.

Y

ou

see, we are also

having our sales convention in

September

.

H

aving

the advertising campaign and

the convention at the same time is going to kill my

September

numbers.

Tyler:

I

don’t

think

that’s

anything to worry about.

W

e

all expect some variation in

actual spending month to

month.

What’s

really important is staying within the

budget targets for the year.

D

oes

that look as if

it’s

goin

g to be a problem?

Sandi:

I

don’t

think so, but just the same,

I’

d like to be on the safe side.

Tyler: what do you mean?

Sandi: well, this is what

I’

d like to do.

I

want to pay the convention

-

related costs in

advance this month.

I’

ll pay th

e hotel for room and convention space and purchase

the airline tickets in advance.

I

n

this way,

I

can charge all these expenditures to

Jul

y’s

budget.

T

his

would cause my actual

expenses to come close to budget for

July

.

M

oreover

, when the big advertising

campaign hits in

September

,

I

won’t

have

to worry about expenditures

for the convention on my

September

budget as well.

T

he

convention costs will already be paid.

T

hus

, my

September

expenses should

be pretty close to budget.

Tyler:

I

can’t

tell you when to make your convention purchases, but

I’

m not too

sure tha

t it should be expensed on

July’s

budget.

Sandi:

what’s

t

he problem?

I

t

looks like no harm, no foul to me.

I

can’t

see that

there’s

anything wrong with this its just smart management.

Ethics and professional conduct in business

The director of marketing for Starr computer Co, Sandi Keller had the following

discussion with the company controller, Tyler Johnson, on July 26, 2014 the

current year.

Sandi: Tyler it looks like I'm going to spend much less than indicated on my

budget.

Tyler: I'm glad to hear it.

Sandi: well I’m not sure it's good news. I’m concerned that the president will see

that I’m under budget and reduce my budget in the future. The only reason that I

look good is that we’ve delayed an advertising campaign. Once the campaign hits

in September, I’m sure my actual expenditures will go up. You see, we are also

having our sales convention in September. Having the advertising campaign and

the convention at the same time is going to kill my September numbers.

Tyler: I don’t think that’s anything to worry about. We all expect some variation in

actual spending month to month. What’s really important is staying within the

budget targets for the year. Does that look as if it’s going to be a problem?

Sandi: I don’t think so, but just the same, I’d like to be on the safe side.

Tyler: what do you mean?

Sandi: well, this is what I’d like to do. I want to pay the convention-related costs in

advance this month. I’ll pay the hotel for room and convention space and purchase

the airline tickets in advance. In this way, I can charge all these expenditures to

July’s budget. This would cause my actual expenses to come close to budget for

July. Moreover, when the big advertising campaign hits in September, I won’t have

to worry about expenditures for the convention on my September budget as well.

The convention costs will already be paid. Thus, my September expenses should

be pretty close to budget.

Tyler: I can’t tell you when to make your convention purchases, but I’m not too

sure that it should be expensed on July’s budget.

Sandi: what’s the problem? It looks like no harm, no foul to me. I can’t see that

there’s anything wrong with this its just smart management.