Business Ethics BADM 304 Case Study Team 6 October 18th 2021.docx

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Main Unethical Issue:
1) The gross profit ratio for Minter Metroplex has been understated, meaning that because the company
failed to record last year’s LCM inventory adjustment to the perpetual records, this year’s gross profit and
pretax is understated by $300,000.00
Alternatives:
1) The leading auditor should let the customer, Minter Metroplex, know the problem as soon as
possible.
2) The leading auditor should let the Minter Metroplex know the problem after discussing the
Minter’s Controller the reason this happened and the better way to manage it now that it has
happened.
3) Disguising the error as a recent reinterpretation of the uniform capitalization rules.
4) Compensating the workers who were laid off at the given time, since they found out about the
financial mistake.
Who are the Stakeholders:
The Shareholders and workers from Minter Metroplex,
The Auditors,
How are the stakeholders affected:
From an Ethical Systems perspective, internal reporting is vital to the health of organizations. Companies
that don’t make it easy for their employees to report small problems internally are likely to find
themselves facing much larger problems externally. People who speak up, even internally, are sometimes
seen as traitors, or as people who are “not team players.”
4. Either Bill is doing something ethical or it's possible that Dawn will be saved as well, and she will
never be punished for it, but management will make the same mistake again.

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5. Bill, on the other hand, will never have to deal with any ethical issues, and she will never lose her
credibility as an auditor or accountant by assisting him.
Truth or Consequences This case study illustrates the situation of internal reporting error. Dawn
and Bill both are working in the same organization. Dawn had dated the Bill but currently, she is
not interested in him. Dawn is the controller of a medium-sized company. Bill is a senior CPA in
charge of that company. During the year-end, Bill found, through his expository survey, that the
gross benefit was downplayed by $300,000 because of the way that last year's LCM's stock was
not appropriately recorded. As a result, she announced the asset of 20 M dollar just because of