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chapter23 305 - (a What are the ethical issues related to...

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(a) What are the ethical issues related to Barbara Brockman's idea? The ethical issues related to Ms. Brockman's idea is she would be falsifying the company's performance with this "window dressed" Statement of Cash Flows. Although on paper the company would look healthy, in reality we know it would not be performing as stated. (b) What would you tell Barbara Brockman? The ethical issues would be falsifying the company's performance with this "window dressed" Statement of Cash Flows. Although on paper the company would look healthy, in reality we know it would not be performing as stated. I would tell Brockman that this practice of falsifying information is unethical and could be misleading to our lenders and investors. If we did not perform up to the numbers, it could in turn lead to other financial issues with our lenders, the investors, stockholders, and ultimately our customers.
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The ethical issues are misleading the loan officer to believe the company is able to generate positive cash flows by "window dressing" the cash flow statement.
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