Essay on Ethical Dilemma in JAU

Paper Type:  Critical thinking
Pages:  5
Wordcount:  1169 Words
Date:  2022-06-19


The first step in ethical decision-making model is obtaining essential facts regarding a situation. In the JAU which is facing a financial problem, Danielle Wright accountable for making financial reporting is faced with an ethical dilemma. She has delayed bills payments and payroll which is due. The organization's largest donor, Bill Megabucks has not paid his pledge quarterly contribution because of Daniella's failure to provide last quarter's financial statements. JAU's CEO, Zach Boyles has directed her not to send them because JAU's operations did not meet the minimum threshold required by the donor agreement which could result in the nullification of donor agreement. Bill in many situations has requested Daniella for the statements which give him different excuses. On a Friday morning, the CEO approaches Daniella instructing her to make quick submission of last quarter's financial statements to Bill. However, he suggests some adjustments on financial statements to show better financial performance after a discussion with the owner of Chuck's company CW Transport. He wants temporarily writing-off the liability that JAU owes to this company. This required Danielle to make an entry that debits Accounts Payable and credits Contribution Revenue by $50,000. Although she presents the real necessity behind such entry, the CEO demands to know whether Daniella will do the entry by Monday morning or not.

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The second step involves identifying ethical issues from the facts and affected a person by ethical dilemma which is Daniella. She is in a dilemma on whether to send the financial statement to Bill as required by the donor agreement or refuse to send them as directed by the CEO due to poor performance. There is also another crucial ethical issue facing her. She has to decide whether or not to make an entry that debits Accounts Payable and credits Contribution Revenue by $50,000. This is aimed to make the financial statements look better. Daniella is affected by these dilemmas because neither of her decisions will solve the primary issue that JAU is facing of financial problem.

The third step in ethical decision-making model involves identifying stakeholders affected by the ethical issues. Firstly, Daniella ethical decision on whether or not to send the financial statement to Bill affects various stakeholders. Among them is Bill, the JAU's largest donor. He is affected because according to the donor's agreement, he is required to receive JAU's last quarter's financial statement. Additionally, Daniella, an employee who is affected by this issues. It affects her duty since as the controller, she is required to send the quarter's financial statement to Bill. Boyles is also likely to be affected by the ethical dilemma. This because the ethical issue will show how the organization is performing which is his responsibility. Entering debits Accounts Payable and credits Contribution Revenue by $50,000 for the write-off liability dilemma will also affect various stakeholders. Chuck Williams might lose the liability that JAU owes him. Daniella is also affected since as the accountant, she is required to show integrity and present a true and definite picture of the financial position of an organization regardless of its performance. Boyles is also affected since it will reveal his failure of overseeing that the financial statements present a true financial position of JAU. Bill is also affected because he will receive inaccurate financial statements. JAU employees are also likely to be impacted since they are likely to receive their payroll which is due.

The four-step involves identifying alternatives present to the individual who is required to solve the dilemma which is Daniella. There are various options that she can choose such as sending Bill financial statements as an honor for the donor's agreement. Contrarily, she can also choose not to send them to follow her boss' orders. Additionally, regarding making an entry that debits Accounts Payable and credits Contribution Revenue for the temporary write-off of the liability by $50,000, she also has various alternatives. She can make the entries and make the financial statement appear better. She can also decline to make the entry and inform Boyles, the CEO that they are not on the same page. She can furthermore suggest to Boyles on the best ways to handle the poor performance evident in the financial statements rather than altering them. For instance, she may recommend the CEO to talk to Williams to spread the loan in installments rather than paying the full amount. This would reveal a better financial statement performance than temporarily writing off the liability.

The fifth step in the ethical decision-making model encompasses determining potential outcomes of every alternative made by the person faced with an ethical dilemma. There are some likely consequences which may occur if Daniella sends the quarterly financial statements to Bill. Bill may stop sending his contributions. For instance, due to poor performance, he may think that his finances are misused rather than being utilized in charitable missions of the organization. Where Daniella chooses to decline to send the quarterly financial statements to Bill to follow Boyles orders there are two consequences. The CEO may think that she is on the same line with him which introduces the second ethical dilemma facing Daniella. Additionally, Bill may choose to terminate the donor agreement hence stopping making contributions due to JAU through Daniella failure to honor the contract. When Daniella moreover decides to make an entry that temporarily writes-off the liability, she may cause some concerns. For instance, this would show Bill an inaccurate quarterly financial position of the organization. It may also bring confusion or omission in future that both debits and credit entry for Accounts Payable and Contribution Revenue respectively were made which is not the case. This also contrary to accounting principles which require that expenses and revenue entries should be made when incurred and received not when paid or promised. On the other hand, when makes the entries, this may show a better financial performance on the quarterly financial statements. This would result in Bill making his quarterly contribution as prove that the finances are efficiently utilized. Daniella suggestion to Boyles to convince Williams to spread the loan to small installments would enable JAU to cater for the employees' payroll without any financial problem. This would show a better financial performance which would convince Bill to make donations.

This is the ultimate step in the ethical decision-making model which requires an individual faced with the ethical dilemma to make appropriate action. Daniella should send the quarterly financial statements to Bill. However, this should be supported by her suggestion to Boyles to talk to Williams with the aim of spreading the loan into small installments. This would make JAU spend less on liabilities leaving much for other expenses such as payroll which is due. Furthermore, she should send the quarterly financial statement to avoid a situation where Bill is forced to stop making his quarterly contributions as the largest donor. Nonetheless, failure to send financial statements is against the donor's agreement which would see the termination of the whole contract. This would significantly affect the entire organization increasing the financial problem.

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Essay on Ethical Dilemma in JAU. (2022, Jun 19). Retrieved from

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