Table of Contents

1.1 Introduction........................................................................................................2
QUESTION ONE........................................................................................................3
1.1 What is an Ethical Dilemma?................................................................................3
1.2 How to Solve an Ethical Dilemma?........................................................................3
Case Study One:....................................................................................................5
QUESTION TWO.....................................................................................................11
CONCLUSION..........................................................................................................15
References.............................................................................................................17

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1.1 Introduction

There has been increasing demand on business and their managers to behave
responsibly and ethically in the conduct of their business activities. This seems
understandable since members of society are an input into business process and are in
turn affected by the output of business processes. Also, enormous resources are at the
disposal of business to prosecute their objectives in a very competitive environment. In
positive and negative ways business touches society. Therefore, it becomes reasonable
for society to demand that they are socially responsive. Business is concern with the
issue of ethics.

Also today, there is an increasing focus on the environment and other global societal
issues leading to the quest for Sustainable Development in almost all aspects of our
lives. This is because the desired quality of life is no longer limited to a better economic
standard of living but intrinsically linked to ecological and social sustainability. The
emerging concept of sustainable development portends a great potential for human
well-being in which the development aspect is concerned with human evolution and
activities on both the social and economic levels, while the sustainability aspect
addresses the stress that such a development places on the environment

The concept of sustainable development according to Leff emerges from a common

purpose of re-valuating nature as an ethical principle and as general condition for global
sustainability of population and production. As such, analyses of ethical theories have
proven ethical reasoning to promote social inclusion, public participation, protection and
enhancement of the environment and stable economic growth with clear and fair
distribution of wealth and levels of consumption. Commitment to sustainable
development agendas should therefore be a rational choice based on ethical reasoning,
with the understanding that ethical behaviour is closely connected to the welfare of
society as a whole, because rational behaviour is much more than rational self-interest,
where rationality requires us to consider the interests of others as well as ourselves.

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QUESTION ONE

1.1 What is an Ethical Dilemma?

An ethical dilemma (ethical paradox or moral dilemma) is a problem in the decision-

making process between two possible options, neither of which is absolutely acceptable
from an ethical perspective. Although we face many ethical and moral problems in our
lives, most of them come with relatively straightforward solutions. On the other hand,
ethical dilemmas are extremely complicated challenges that cannot be easily solved.
Therefore, the ability to find the optimal solution in such situations is critical to
everyone. Every person may encounter an ethical dilemma in almost every aspect of
their life, including personal, social, and professional.

1.2 How to Solve an Ethical Dilemma?

The biggest challenge of an ethical dilemma is that it does not offer an obvious solution
that would comply with ethics al norms. Throughout the history of humanity, people
have faced such dilemmas, and philosophers aimed and worked to find solutions to
them.

In solving numbers of solution when solving an ethical dilemma u have to look at the
following areas:
 Identify the ethical problem.

You have to determine precisely what must be decided, i.e. determine whether there is
an ethical issue and/or dilemma. Is there a conflict of values, or rights, or professional
responsibilities? Which clause of the Code of Conduct is affected by this dilemma? If
no connection can be made, there is no ethical problem. The first step in analyzing
ethical issues involves recognizing that there is a problem that requires resolution and
a thorough understanding of the problem. The problem may seem obvious but it is
advisable nonetheless to still undertake research, investigation, and study until it the

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whole problem is understood. Do not make the mistake of rushing off to solve a
problem, which may not address what is really wrong underneath.

 Identify affected parties

Who is affected? Who will be affected by any decisions made and the execution of the
solution? If you have any doubts or questions as to what the proper course of conduct
should be in any given situation, consult with relevant stakeholders, the interested and
affected parties. Certain key role players form part of the process of finding the best
solution to an ethical problem. Seeking co-operation and involvement of all the
stakeholders will improve the transparency and legitimacy of the engineering operation.
The participation of all those affected by the ethical problem is important and needs to
be clarified. The resolution of conflict cannot rest in the hands of one or two individuals.
Decisions can affect a wide range of people. Ideally, decisions should not be taken by
one person. To improve the quality of decisions, problems should be solved by means
of group discussion and participation.

 Explore optional solutions

What is the solution to this problem?

This step involves formulating and devising a full range of alternatives. This is a vital
step towards establishing agreement for the final decision. From the information
gathered, alternative actions are formulated. One must look for a number of
alternative solutions. The first solution is not necessarily the best one and a few
alternatives should be considered.

Problem solving involves developing a choice of strategies. It is unusual for only one
solution to immediately present itself as the obvious and ideal answer. Sometimes it is
the least undesirable solution that ends up being chosen as the best solution. Potential
strategies are explored that will address and permanently eliminate the root cause. In
this step a complete list of possible solutions is generated.

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  Evaluate solutions

What options do we have? Evaluate and prioritise each solution in accordance with the
general interests of those involved.

In this step, each idea is evaluated and compared. Each alternative is weighed
according to its advantages and disadvantages and the alternative with the most
advantages and the least disadvantages is then selected.

Case Study One:

Frank Doran has been informed that the firm he has been working for, the Cruz and
Santos, CPAs, has a plan to promote him as one of the partners if he continues to
perform the same high-quality level like he was doing in the past, currently, he is a
senior audit manager in the firm. Frank Doran is exceptionally good at dealing
effectively with all people, including client personnel, professional staff, partners, and
potential clients. Recently, he has built a bigger home for entertainment and he has
joined the city's most prestigious golf and tennis club. Knowing about the plan of the
partners for him, he is excited about his future with the firm. Machine International, a
large wholesale company ships goods throughout the world, one of the most
prestigious clients of Bright and Lorren, was recently assigned to Frank Doran for him
to audit the company. Throughout the audit, Frank determines that Machine
International uses a method of revenue recognition called "bill and hold" that has
recently been questioned by the Security and Exchange Commission. After thoughtful
analysis, Frank decides that the method of revenue recognition is not appropriate for
Machine International. In reviewing the subject with the engagement partner, she
concludes that the accounting method has been used for more than 10 years by the
Machine International and is appropriate, especially considering that the client does
not file with the SEC. The partner is definite that the firm would lose the client if the
revenue recognition method is found inappropriate. However, Frank argues the
revenue recognition was appropriate in prior years, but the new SEC ruling makes it
inappropriate in the current year. Frank recognizes the partner's responsibility to make

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the final decisions, but he feels strongly enough to state that he plans to follow the
requirements and include a statement in the working papers that he disagrees with the
partner's decisions. The partner informs Frank that she is unwilling to permit such a
statement because of the potential legal implications. However, she is willing to write a
letter to Frank that she takes full responsibility for making the final decision if a legal
dispute ever arises.

Ethical Issue

Is it ethical for Frank Doran to disagree with the partner's decision about the audit
report that they will issue regarding Machine International or for him to not disclose his
findings of the violated rulings of the Security and Exchange Commission by Machine
International?

Who is Affected and How is each Affected?

Frank Doran

 He can't state that he disagrees with the decision of the partner.

 They may lose the client if he pushes through with his opinion.

 It may affect his future position in the firm.

 It may have a negative result and a bad impression of the partners of the firm.

 Attitude about the partner may be affected.

 The impression of the other staff to him may be affected and they may see him
as someone who doesn’t recognize other’s opinions.

Engagement Partner

 Her opinion may create audit risk.

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  They may lose the client if she will not pushes through with her opinion.

 A misstatement is possible because of her opinion.

 May not conclude the right assessment of the client's financial report.

 May create a misunderstanding of how they conclude their report because of her
attitude towards the other auditors.

Cruz and Santos, CPAs

 They may lose a big client.

 Engagement partners may create misstatements about the audit report.

 Partners may have barriers with each other and will create misunderstandings
because of different opinions.

 Because of the attitude that an engagement partner will always or often say that
he/she will be responsible for their audit reports, some staff may not drive their
fear out and will be afraid or will not mind to open up their suggestions and
opinions.

SEC

 One of the rulings may be violated.

 May not check the financial statement of the company and if they comply with
their rulings since it does not file to them.

Machine International

 May violate SEC rulings.

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  They may not correct their error of revenue recognition.

 The financial information like accounts receivable and sales may result in
overstatement due to their bill and hold revenue recognition.

Users of Machine International Financial Statements

 Investors of the company may think that Machine International has always a big
amount of sales not knowing about its revenue recognition, which is the bill and
hold.

 The overstatements of the sales may become a major factor in the decision
making of the managers for the company and they may not make an appropriate
decision for their future plans with these unrealistic sales.

Frank Doran’s Alternative Solution

 As a senior audit manager, it is his duty to review the reports so he should

always make sure that his opinions were right and base on factual sufficient
appropriate evidence before making a conclusion.

 Notify the Machine International that their bill and hold revenue recognition is
not appropriate according to the new ruling of the Security and Exchange
Commission.

 Advice the Machine International to follow the ruling of SEC, and change its
revenue recognition before it may review by others that their sales are not their
official currently sales as of the moment.

 If it is proven, that according to the sufficient appropriate evidence that the

revenue recognition of the Machine International was inappropriate, he should
disagree with the opinion of the engagement partner that the financial
statements of the company do not comply with the framework.

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  If the engagement partner insists on her opinion and conclusion, given that the
Machine International’s financial statement was inappropriate wrong, he should
refuse to continue with the engagement.

 If, however, there is not much sufficient appropriate evidence that the financial
statements of the Machine International were inappropriately done, Frank Doran
should always look towards all possibilities and listen to the point of the
engagement partner.

Consequences of Each Alternative

 If he works according to the code of ethics of an auditor, it is highly likely for him
to make a conclusion that was based on facts and as a result, the audit report
that will be attached to the financial statement will have a high assurance.

 If Machine International will have knowledge that its revenue recognition was
made inappropriately, they may either choose between to right their sales or to
continue with their bill and hold, however, the company’s response to the
auditor’s advice is unknown and as a big client, there will be a big risk that Cruz
and Santos, CPAs will lose their big client if the Machine International doesn’t like
the intention of the auditors to correct their wrongdoings.

 The engagement partner may ask him to just agree that the revenue recognition
of the Machine International as appropriate, however, he may also be
responsible when a legal dispute arises.

 Frank Doran may not be able to perform the audit and he will not be able to
correct the misstatement of the client's financial statement and financial
information.

 He may not be able to become a partner in a year or two if he continues to

disagree with the engagement partner.

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Appropriate Action

Frank Doran is the one that will choose whether which action for him is ethical and
which appropriate decision he will make that fall everything into its rightful places.
Because personally, I think one may be unethical for others but it is ethical for another
person. However, as an auditor, I think it is always right to know the code of ethics that
must be followed not only by professional accountants but even the external and other
auditors. I think it is only right for Frank Doran to write a report stating his findings and
conclusion about the financial report of Machine International. Because it is not just for
his own sake-when there will be a legal dispute that will arise- but rather for all the
stockholders, stakeholders, and other interested parties that will use the financial
statements of the company to know about the doings of Machine International, as it is
crucial in their decision making. Furthermore, in making his decision, he should also
consider all the factors that may affect their firm because he carries it with him as a
senior audit manager, together with his staffs in the team, they all should check every
little detail to come up with an appropriate conclusion that is rightly based on sufficient
appropriate evidence.

Case Study Two:

Conducting Personal Business on Company Time

Because employees tend to spend so much of their weekday hours on the job, they
often are tempted to conduct personal business on company time. This can include
setting up doctor's appointments on company phone lines, making vacation
reservations using their employer's computers and Internet connections or even
making phone calls for a freelance side business while on company time.

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At first glance, this ethical dilemma is fairly clear: It is an abuse of your employer to
conduct personal business on company time. But there are shades of gray here. What
if your spouse calls to tell you that your children are ill? Is it OK for you to schedule a
doctor's appointment? A good rule of thumb is for an employee to check with his
manager or human resources supervisors to clarify what counts as an actionable
offense in the company.

QUESTION TWO
In sum, virtue, rightness, consequence, and context are all ethically important in
navigating sustainability. A sustainable society lives within the carrying capacity of its
natural and social system.

Most of the people that we have a moral responsibility to care about are not yet born.
Yet it is precisely these people who will be the beneficiaries – perhaps the chief
beneficiaries -- of ethics of sustainability. There are nearly seven billion human beings
currently living on this earth. Assuming that no massive catastrophes occur, however,
the vast majority of people the planet will ever have known are yet to arrive. They will

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be our descendants – our children, grandchildren, great-grandchildren, and their
progeny.
In simple terms, sustainability as a system delivers services without exhausting
resources; i.e. uses all resources efficiently both in environmental and economic sense.
Ehrenfeld presents that “sustainability is an existential problem, not an environmental
or social one and accordingly we cannot and will not begin to take care of the world
until we become whole ourselves.” This understanding bothers on human morality.
Ehrenfeld further defines sustainability as “the possibility that humans and other life will
flourish on earth forever.” This gives a more fundamental meaning than the Brundtland
definition which entails meeting “the needs of the present without compromising the
ability of future generations to meet their own needs”.

Many have elaborated on the principles of morality as the fundamental gateway to

achieving sustainability. Gomis et al. contend that sustainability is a moral way of
acting, and ideally habitual, in which the person or group intends to avoid deleterious
effects on the environmental, social, and economic domains, and which is consistent
with a harmonious relationship with those domains that is conducive to a flourishing
life. Giving the challenges facing the earth today, a much more meaningful instrument
is required to address the limits of the earth’s resilience and our failure to curb
consumption. This has to be a new ethical system based on ecological carrying capacity
of the earth.

Today, we are faced with the daunting problems of greenhouse effect, the destruction
of ozone layer, the presence of toxic and nuclear wastes; with such negative effects as
the growing disappearance of wilderness areas, a steady loss of biodiversity and even
the actual extinction of some species. These problems call for a definite ethical-driven
solution approach with an environmental dimension. On this basis, environmental ethics
(among other sustainability ethics) becomes very important because the explosive
growth of scientific knowledge, followed shortly by a parallel growth in technical
ingenuity, has created an explosive growth in moral problems- some unprecedented in

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human history. In our time …with knowledge come power, and with both knowledge
and power, we have lost our innocence. Science and technology and the law, as
advance as they are, have not provided the necessary solutions to the worldwide
quagmire into which humankind has slipped.

Generally, the need for ethical application arises as a concern with actions and practices
directed to improving the wellbeing of people. Thus, environmental ethics is concerned
with the morality (right and wrong) of human actions as they affect the environment or
natural world we live in. The effort is focused on addressing global environmental
problems which we are currently familiar with due to the massive increase in global
human population; and the associated urbanization, industrialization, and technological
advancement. This causes increased pollution of the air, water and soil; and has also
added the depletion of these and other important natural resources.

In the light of the moral advocacy, Peter Espeut writes;

“Mankind must respect the integrity of the living system which is the planet Earth; in a
real sense the earth has rights. The rights of humans should not supersede Earth rights,
but rather be aligned and in balance with them to ensure the survival, diversity,
sustainability and harmony of the planet. The pursuit of profit and the right of man to
procreate does not supersede the right of Earth to remain in biodiversity and free of
danger from pollution.”

Decisively, the advocated moral practice refers to social norms and values that guide
both individuals and their interaction with their fellow human beings and communities,
and with their environment. These moral factors are usually interwoven with religious
practices and social power structures.

I. The decisions we make and the actions we take today will affect the
lives and livelihoods of these billions of future human beings.

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Every discovery we make and every innovation we produce is a gift we bestow on
future generations. Our learning, moral and social development, economic prosperity,
and technological progress provide our legacy to them. But we not only provide
benefits -- we also bestow burdens. Every non-renewable natural resource that we
consume leaves less for them. Every pound of carbon dioxide that we emit into the
atmosphere contributes to the warming of a planet they will inherit. Every species we
cause to go extinct they will never know, except as a loss. If we weigh the moral
significance of an action by the
number of people it potentially affects, then the impact of our actions on future
generations ought to be of paramount concern. This is the realm of intergenerational
justice, and it sits at the core of any ethics of sustainability. It is easy to acknowledge
our responsibility to future generations. In practice, however, it is the present that
typically claims our attention. Former Vice-President Al Gore, who produced the
academy-award-winning film, An Inconvenient Truth, and won the Nobel Peace Prize,
observed that we deplete the earth’s natural resources and live unsustainable lives
because "the future whispers while the present shouts."

II. A sustainability framework attempts to give equal voice to the future.

It prompts us to consider the burdens we thrust upon our progeny as well as the
benefits we bestow upon them. While living sustainably requires planning and
precaution, it does not entail paralysis. Ethics of Sustainability promotes caring about
tomorrow but acting today.
III. Intergenerational Justice at the heart of most ethical traditions lies a
preoccupation with how moral concern is extended in social space.
The individual is held responsible to care not only for his or her own interests, but also
to consider the welfare of the family, of neighbors, of fellow townspeople or citizens,
and perhaps of humanity at large. Immanuel Kant's categorical imperative, which we
addressed in states that the rules or axioms guiding one's actions must be
universalizable. That to say, these rules of practice must remain consistent and
applicable when extended across an indefinitely wide population. Jeremy Bentham's

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utilitarian ethics, though traditionally opposed to Kant's duty-based reasoning, also
assess action according to its capacity to be extended in social space. With Bentham's
utilitarian calculus, however, the greatest happiness of the greatest.

Conclusion
A reflection on ethical dilemmas shows inherent conflicts in their resolution. The conflict
is more pronounced for managers working in other countries under different cultural
orientations. However, ethical dilemma can be resolved through discussion, analysis
and collective decision making processes that define the lines of boundaries for foreign
managers, taking into consideration organizations‟ and their managers‟ personal value
systems. This is so because ethical dilemma resolutions may be between two or more

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personally held values and values held by another person or organization, basic
principles and the need to achieve a desired outcome and between two or more
individuals or groups to whom one has an obligation (Kirrane, 2009). Resolving ethical
issues require the inputs of all stakeholders: multidisciplinary and dimensional
approach.

Resolving ethical dilemma, therefore, requires interpersonal and negotiation skills as

well as a new application of employability skills: honesty, ability to work cooperatively,
respect for others, pride in one’s work, willingness to learn, dependability, responsibility
for one’s actions, integrity and loyalty (Lankard, 2008).
Businesses are training their employees in critical analysis and conflict resolution skills
required for ethical decision making. More importantly, new employees are sought with
these skills and school curricula have also stressed the importance these skills to
management. The best way to resolve ethical dilemmas is through development of
ethical programmes at all levels of an organization.

The quest for a sustainable world in which man and other life in the environment would
co-exist in a flourishing manner now and in the future has prompted the need to
determine the effects of morality and ethics on sustainable development. However,
theoretical reviews and analyses have revealed that ethical values are the basis of
decision-making and action in accordance with ideal accepted in a given moral system.
Such values are promoted through ethical principles which would assist to transform the
behaviour of the people in the society. In fact, undertaking ethical analysis helps to
identify human and non-human interests, and the value of ecosystem as a whole.
Therefore, addressing the well-being of the ecosystem in itself and the basic human
interests, and the long-term social benefits thereof becomes a crucial assignment. This
would eventually lead to accomplishing the objective of sustainability in meeting the
basic human needs of welfare, freedom and justice for the present and also for future
generations through the application of the overall sustainability ethics. This paper

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therefore recommends further studies on specific dimensions of sustainability ethics like
bioethics, care ethics, environmental ethics, climate change ethics, administration
ethics, development ethics, ethics of science and technology, etc. for better
understanding, participation and implementation of sustainability endeavours.

References
Abiodun, J. A., 2014. Ethical Dilemmas In Management: An African Perspective. Journal
of Business Systems Governance & Ethics.

Kaptein, Muel and Mark S. Schwartz “The Effectiveness of Business Codes: A Critical
Examination of Existing Studies and the Development of an Integrated Research
Model.” Journal of Business Ethics.  77:2 (2008) 111-127.

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Kendrick, Kaetrena Davis and Echo Leaver. "Impact of the Code of Ethics on Workplace
Behavior in Academic Libraries." Journal of Information Ethics.  20(1): 86-112.

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