Rita Pelzer was just hired as the assistant controller of Liu Stores. Th e company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Rita will manage. Her main responsibilities are to maintain the company's high credit rating by paying

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Rita Pelzer was just hired as the assistant controller of Liu Stores. Th e company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Rita will manage. Her main responsibilities are to maintain the company's high credit rating by paying all bills when they are due and to take advantage of all cash discounts.
Jamie Caterino, the former assistant controller, who has now been promoted to controller, is training Rita in her new duties. He instructs Rita to continue the practice of preparing all cheques for the amount due less the discount and to date the cheques the last day of the discount period. "But," Jamie continues, "we always hold the cheques at least four days beyond the discount period before mailing them. That way we get another four days of interest on our money. Most of our creditors need our business and don't complain. And, if they scream about our missing the discount period, we blame it on Canada Post. I think everybody does it. By the way, welcome to our team!"
Instructions
(a) What are the ethical considerations in this case?
(b) Which stakeholders are harmed or benefited?
(c) Should Rita continue the practice started by Jamie? Does she have any choice?
Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,...
Related Book For answer-question

Accounting Principles Part 1

6th Canadian edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

ISBN: 978-1118306789