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Ethics N Business

RUNNING HEAD: Ethics in Business PROBLEM 1–4 Ethics and the Manager 1. According to the IMA’s Statement of Ethical Professional Practice, would it be ethical for Perlman not to report the inventory as obsolete? Under the credibility line of the statement of ethical professional practice, it says that each member has a responsibility to disclose all relevant information that could reasonably be expected to influence an intended users understanding of the reports, analysis, or recommendations, and they must communicate information fairly and objectively.

Although this is what they as a whole decided to do, does not mean it is ethical. Not reporting this information accurately would be unethical. They would only be doing this to get a bonus, by making their profit, and sales growth look better. This would be cheating and would benefit the management personnel, but not the company. If Perlamn feels that they are not making an ethical decision, he should then discuss it the first chain on command. 2. Would it be easy for Perlman to take the ethical action in this situation? It would be easy for Perlman as long as he follows the chain of command.

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He should first discuss it with the management personnel, and if they do not cooperate, and still no want him to report the inventory, he should then follow the chain of command. He should clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counselor or other impartial advisor to obtain a better understanding of possible courses of action. He should also contact a personal lawyer. PROBLEM 1–7 Ethics in Business 1. How would this behavior affect customers? How might customers attempt to protect themselves against this behavior?

When a business is in a situation like this, they will only hurt themselves. The customers will lose faith in them, and protect themselves by not coming back. They could also report it as unethical, especially if the business was not being honest with them, and trying to beat them out of money. Customers want to find a repair shop that they can trust will be honest and not try to scam them. 2. How would this behavior probably affect profits and employment in the automotive service industry? This behavior would most definitely affect the profits and employment in the automotive service industry.

The profit would suffer because people are not going to come back to a place that rips them off. They are also going to tell everyone they know about this particular place. To make profit in a business you have to keep the customers happy and most of all, coming back. The employment would suffer because the loss of profit would mean less money to pay these employees, fewer hours, and possibly employees being laid off. If the business is not trustworthy, they will eventually go out of business too. References Garrison, R. H. , Noreen, E. W. , & Brewer, P. C. (2008). Managerial accounting (12th ed. ). New York: McGraw-Hill/Irwin.


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