CASE STUDIES

ETHICAL BEHAVIOR
Consider the following scenario :
Manager : If I can reduce my costs by P40,000 during the last quarter, my
division will show a profit that is 10 percent above the planned level and I will
receive a P10,000 bonus. However, given the projections for the fourth quarter it
does not look promising, I really need that P10,000. I know one way I can qualify.
All I have to do is lay off my three most expensive salespeople. All most , most of
the orders are in for the fourth quarter, and I can always hire new sales personnel
at the beginning of the year.
Required
What is the right choice for the manager to make?
Why did the ethical dilemma arise?
Is there any way to redesign the accounting reporting system to discourage the
type of behaviour the manager is contemplating?

LINE VERSUS STAFF

The job responsibilities of two employees of barney Manufacturing follow.
Mariel Dinglasan, Cost Accounting Manager. Joan is responsible for measuring
and collecting costs associated with the manufacture of the garden hose product
line. She is also responsible for preparing periodic reports comparing the actual
costs with planned costs. These reports are provided to the production line
managers and the plant manager. Joan helps explain and interpret the reports.
Eryl Siman, Production Manager. Eryl is responsible for the manufacture of the
high-quality garden hose. He supervises the line workers, helps develop the
product schedule, and is responsible for seeing that production quotas are met.
He is also held accountable for controlling manufacturing costs.
Required: Identify Mariel and Eryl as line or staff, and explain your reasons.

ETHICAL ISSUES
Kong Manufacturing Company produces component parts for the airline industry
and has recently undergone a major computer system conversion. Mandy
Saldivar, the controller has established a troubleshooting team to alleviate
accounting problems that have occurred since the conversion. Mandy has chosen
Ms. Atribida, assistant controller, to head the team that include Nonielyn Lim,
cost accountant; Ma. Angelica Atterado, financial anayst; Jefferson De Lara,
general accounting supervisor and Hannah Adoc, financial accountant.
The team has been meeting weekly for the last month, Ms. Atribida insists on
being part of all the team conversations in order to gather information, make the
final decision on any ideas or actions that the team develops, and prepare a
weekly report for Michael. She has also used this team as a forum to discuss
issues and disputs about him and other member of Kongs top management
team. At last weeks meeting, Ms. Atribida told the team that she thought a
competitor might purchase Kongs common stock because she had overhead
Mandy talking about this on the telephone. As a result Kongs employees now
informally discuss the sale of Kongs common stock and how it will affect their
jobs.
Required
Is Ms. Atribidas discussion with the team about the prospective sale of Kongs
common stock unentical?
Discuss, using specific standard from the code of ethical conduct to support your
position.