Case 6 61 Scene 1: THE PROBLEM Gary: Donna I need to talk to you. We have a big problem. We badly need a loan.

. Our operating cash is running low. You know we are not in a good financial position. We need to show as much assets and income as possible to have this loan. Donna: I understand but theres nothing much we can do now. We are already at the last week of the fiscal year. Gary: Yes we can, Donna. We just need some creative accounting. So heres my idea: We have partially finished machines in process at 20% completion. We can alter it and make it 80% completed. This will increase our equivalent units, decreasing our cost per unit and our Cost of Goods Sold by millions! The value of our work in process will also increase, thus, increasing our overall assets. What do you think? Donna: This is too risky, Gary. The auditors will easily catch this! Gary: The auditors will be here at least 6-8 more weeks! By that time, the machines are already completed. We can have our workers work overtime by giving them bonuses. This will be only charged in Factory Overheadnext years overhead! Donna, we badly need the loan. If we dont do this, we could lose our jobs!

-Several weeks afterBoss: Dont you think the auditors will catch this? HUH? You have ruined the hard-earned reputation of this company! BOTH OF YOU, ARE FIRED!

Scene 3: IF DONNA RESISTED AND GARY AGREED Donna: No Gary. As much as we want to have this loan, still, can your conscience handle this lack of integrity? This should never be an option, Gary. Gary: I understand.

Scene 4: DONNA REPORTS GARY TO A SUPERIOR Donna: Sir, I need to tell you something. -Pretend that theres a conversationSuperior: Thanks Donna. Gary will have some serious explaining to do.

Scene 5: DONNA REFUSED BUT GARY INSISTED Donna: No Gary. You cant include me on this. Gary: You will regret this Donna. Ill find my own ways.

Scene 6: IF DONNA IS 63 AND EMPLOYMENT IS BLEAK Gary: Dont worry. The companys owner is my father-in-law. We will have our backs covered! Old Donna: **Thinks hard**

Scene 2: IF DONNA AGREED Donna: Okay lets do this.