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The Bottomline

Go New or Continue
Group 7
Lopez, Elric Shan
Madi, Jady
Manzano, Kasteen Kyla
Olegario, Ethel Rose
SUMMARY
A consultant was hired to review the
financial control system of a company. Upon
reviewing it, the consultant found out that the
system is already out-dated and the results to be
reported were not that impressive for the
stockholders.
The consultant would like to suggest some
revisions on the system but the current president
designed it and his image was in sake.
ASSUMPTIONS
1. The system is not applicable to their new
policy and the data gathered are no longer
timely and relevant to the company which
results to many dissident stockholders.

2. Management consultant is concerned with


the improvement of the company’s system.
ASSUMPTIONS
3. The dissident stockholder has a controlling
interest in the company.

4. The new controller is not responsible


enough to see the defects in the system.

5. The president has just been promoted


thereby afraid of his possible demotion.
DILEMMA/ ETHICAL CONFLICT
• Will the consultant put his decision at risk in
order to improve the company’s system or
remain silent in order to keep his good
relationship with the company?
APPLICABLE CODE OF ETHICS

• Basic Principles
- Integrity and Objectivity
- Independence

• Business Conduct Standards


ALTERNATIVE COURSES OF ACTION

1. Disregard the discovered antiquated


procedures and continue using the old
system.
2. Make a full disclosure of the matter to the
President privately.
3. Inform the Board of Directors about the
problem.
PROS AND CONS
1. Disregard the discovered antiquated
procedures and continue using the old system.
PRO
The consultant remains rendering service in the
company with no improvements.

CON
The clients financial control system remains
antiquated which results to probable withdrawal
of the shareholders.
PROS AND CONS
2. Make a full disclosure of the matter to the
President privately.
PRO
If the president understands the situation, he will
agree to go forward and improve the company’s
financial control system.
CON
The clients financial control system remains
antiquated which results to probable withdrawal
of the shareholders.
PROS AND CONS
3. Inform the Board of Directors about the
problem.
PRO
The company will have knowledge about out-
dated financial control system and may take
action to prevent dissenting stockholder.
CON
It is unwise because the consultant didn’t follow
the process of reporting the problem concerning
the delegation of position in the company.
BEST COURSE OF ACTION
Make a full disclosure of the matter to the
president privately. This is the honest and
ethical solution as such matter concerns the
company internally. Additionally, this may help
to prevent dissenting stockholders and the
president may agree to move forward.