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You have been hired as the new
controller of a large manufacturing company. The 30-year-old company produces a
selection of profitable products, but has also experienced some ethical lapses.
A few months into your new role, the CEO has asked you to prepare a memo that
will provide guidance to management for handling some of these ethical lapses.
As you investigate, you discover a negative atmosphere in the company. Your
investigation reveals the following information:
CEO: “We need to
create a way to make sure our company goals are defined and align with the
highest ethical standards. We have experienced issues in almost every
department, and I am trying to focus on what we can do. I know you have spoken
with others, and I suspect there is some unethical behavior occurring. I have
heard that the accounting department has experienced some issues in the past.
Specifically, issues with fake suppliers being created and paid. While this did
result in the termination of one employee, I’m not sure it has stopped.”
Accounts
Receivable Supervisor:
“Things are pretty bad around here. There doesn’t seem to be any leadership or
direction for the company. Upper management rarely conducts meetings to discuss
anything, positive or negative. There are no clear goals and we only receive
feedback once a year at our annual review. I have difficulty keeping the staff
motivated because the meager raises. We all receive the same raise, even in a
booming year when sales are high.”
Accounts Payable
Supervisor:
“I used to be energetic when I started working here. I suppose this place just
wears you down after awhile. There doesn’t seem to be any correlation between
pay and performance. You can be a high performer and receive a 2% raise or be a
low performer and receive a 1% raise. Most of the staff have given up, and view
their position as a job rather than a career.”
Upon further inspection, you
discover that the vendor files are in disarray, and there is no proper backup
to support the invoice and expense reports that have been paid.”
Sales Team
Manager:
“I am having difficulty getting the sales team to visit their accounts and
provide acceptable customer service. Part of the problem is that the company
has set the commission schedule to prior standards, when sales were easy to
acquire. Each salesperson receives only 1% commission on the sales in his or
her territory. I am beginning to wonder if they are visiting the existing
accounts anymore. Sales are still healthy—no one seems to ask questions when
the sales are healthy—but we are not seeing many new sales.”
Prepare a 750- to
1,050-word memo addressed to the management.
Explain some of the
underlying motives contributing to the unethical behavior.
Recommend a few changes
that might alleviate some of the unethical behavior and improve employee
morale.
Address the common
fraud schemes in the outflow of company funds, including check tampering,
payroll schemes, and expense reimbursement schemes.
Suggest several
controls for the company to implement in order to prevent these schemes.
Research using your
textbooks and at least two outside sources.
Format your report
consistent with APA guidelines.
Submit
a
Certificate of Originality
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