EDU10011 Case Study: Ethical Dilemma in Accounting Practice

This case study presents an ethical dilemma faced by a student during an accounting internship at a non-profit organization, Big Lakes Accountants. The dilemma involves the General Manager asking a new accountant to manipulate financial figures to secure a government grant, a practice that has been ongoing for years. The student analyzes the situation, considering the conflicting values of task performance and care for others, as well as the influence of personal values like fairness and empathy. The case study identifies three key ethical questions: whether the accountant should blow the whistle, if presenting current year data is justified, and if the student should report the issue. The student proposes solutions, including internal whistleblowing and referencing the CPA Australia's code of ethics, specifically sections 320 and 340, which emphasize truthful reporting and prohibit manipulation of information. The conclusion emphasizes the accountant's duty to report the misconduct to promote ethical practices within the organization and build a better workplace. The case study uses references to support the analysis and recommendations.

Ethical dilemma
Ethical dilemma in the field of accounting
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Table of Contents
Introduction...........................................................................................................................................1
Dilemma description.............................................................................................................................1
Value discussion....................................................................................................................................1
Ethical Questions and Solutions............................................................................................................2
Conclusion.............................................................................................................................................3
References.............................................................................................................................................3
Introduction
In our daily work life, we come across various ethical dilemmas and decision to act in such
situations depend a lot on the present situation and our own value system. The present report
deals with the ethical dilemma related to work experience in the field of accounting. The
present report deals with the role of personal values and ethics as well as professional code of
ethics for the solution of ethical dilemma faced by me during my recent internship.
Dilemma description
I faced this situation during my recent internship in the accounting department of a non-profit
firm, Big Lakes Accountants. I overheard a conversation between the general manager of the
company and a newly joined accountant. I heard that accountant was asked to present the
financial figures of current year instead of previous year in order to secure a crucial
government grant. I also came to know that the practice has been going on for years and the
accountant is threatened of his job in case of he refuses to oblige the general manager’s
demands. The accountant also hinted at the possibility of other financial crimes in the
organization. This situation put me in deep confusion regarding my future course of action.
Value discussion
Personal values are very important factor in a person’s decision-making process. Values are
set of beliefs which influence the way a person acts and thinks (Fritzsche & Oz, 2007).
Ethical decision making is influenced by both individual and organizational factors and the
value system of the decision maker is a very important personal factor. When it comes to
business decisions like the one mentioned above, there is often clash between the non-
compatible values, causing a decision-making dilemma. For example, in this case I found a
clash between the confronting values of task performance and care for others. It was my duty
to perform the right duty by telling the authorities, but it would mean causing trouble to the
company as well as accountant

Since values at workplace do not operate in isolation, we often find our values in conflict
with the values of our colleagues and senior managers. In this case, where my value system
told me to bring up the issue to the notice of top management or authorities if needed, the
value system of the general manager was based on hedonism and he was too focused on
getting those grants instead of enquiring the loopholes in the accounting system. Another
value which often tends to effect ethical decision making is the ability to take risk. If I decide
to blow the whistle, it will be a lot of risk to the extent of losing the job. Fairness has been a
very important value in my life and it is very important for me that polies around me are fair
and transparent. This situation is a blatant violation of the concept and as such prompts me to
take necessary action. Empathy is another value which helps in decision making. The ability
to be empathetic allows a person to see situation from the other person’s point of view and as
such makes the decision more holistic (Pohling et al., 2015).
Ethical Questions and Solutions
The first ethical question is that should the accountant blow whistle on general manager, and
report to the authorities which might lead to the loss of client and loss of job for him. The
second question is that is it justified to present current year’s data to the government to get
grants. The third question is that should I put the statement myself as it would save the
accountant from loss of job but a lot of risk for myself.
In case the senior accountant decides to blow the whistle, he has to take a lot of risk. It is very
difficult for him to run his family in case he loses his job, but not doing so might also lead to
him becoming an accompanist. In case a person does not reports a misconduct, any future
enquiry will hold him equally responsible (Malek, 2010). He should not agree to agree to the
wrong practice and go for internal whistleblowing, jumping the chain of command
(Farooqiab, et al., 2017)and going to the top management either openly or anonymously.
Whistleblowing is a very successful method in avoiding big financial problems in majority of
the companies (Valentinea & Godkin, 2019) so the top management might consider this
complaint positively.
As far as the second question is concerned, it can be solved with the help of code of ethics for
professional accountants as prescribed by CPA Australia. As per section 320, it is
responsibility of the report provider to prepare the reports in a truthful manner. In case the
information is not right in his understanding, he must report so a to the concerned authorities.
Also, as per section 340, accountants are not supposed to manipulate the information (CPA

Australia, 2014). This indicates that the wrongful practices must be reported to the top
management and the government. The profession of accounting demands high level of
integrity (Alleyne, et al., 2013) and the accountant should act in an objective manner to
follow the CPA code of ethics.
In third situation, it is the tussle between empathy and risk. I have always found myself
lacking in risk taking capability, but at the same time proximity to the victim has led to
increased feeling of empathy in me (Noval & Stahl, 2017). In such case, I should inform the
authorities of the problems in the accounting firm so that audit can be performed. My loss
will be much lesser since it is just an internship and I do not have any dependents on me.
Auditing will also expose the wrong practices happening in the firm which will ultimately
improve the organization culture, thereby reducing the possibility of any such future issues.
Conclusion
As it can be seen from the above arguments, accountant should bring the matter to the notice
of senior authorities. It is his duty as per the professional and personal ethics. This act of
whistleblowing will help in highlighting the wrong practices being done in the organization
and build a better and more ethical workplace.
References
Alleyne, P., Cadogan-McClean, C. & Harper, A., 2013. Examining Personal Values and Ethical
Behaviour Perceptions between Accounting and Non-accounting Students in the Caribbean. The
Accounting Educators' Journal, 23, pp. 47-70.
CPA Australia, 2014. An overview of APES 110 code of ethics for professional accountants, s.l.: CPA
Australia.
Farooqiab, S., Abidb, G. & Ahmedb, A., 2017. How bad it is to be good: Impact of organizational
ethical culture on whistleblowing (the ethical partners). Arab Economic and Business Journal, 12(2),
pp. 69-80.
Fritzsche, D. J. & Oz, E., 2007. Personal Values’ Influence on the Ethical Dimension of Decision
Making. Journal of Business Ethics, 75(4), pp. 335-343.
Malek, J., 2010. To Tell or Not to Tell? The Ethical Dilemma of the Would-Be Whistleblower.
Accountability in Research , 17(3), pp. 115-129.
Noval, L. J. & Stahl, G. K., 2017. Accounting for Proscriptive and Prescriptive Morality in the
Workplace: The Double-Edged Sword Effect of Mood on Managerial Ethical Decision Making. Journal
of Business Ethics:, 142(3), pp. 589-602.
Pohling, R., Bzdok, D., Eigenstetter, M., Stumpf, S. and Strobel, A., 2015. What is Ethical
Competence? The Role of Empathy, Personal Values, and the Five-Factor Model of Personality in
Ethical Decision-Making. Journal of Business Ethics, 137(3), pp. 449-474.

Valentinea, S. & Godkin, L., 2019. Moral intensity, ethical decision making, and whistleblowing
intention. Journal of Business Research, 98, pp. 277-288.