Accounting Ethics

1. You work as an internal auditor for a manufacturer. Your employer has a strict policy against internal auditors engaging in romantic relationships with company employees. All employees frequently are warned that they will be fired if they violate this rule.Despite this policy, you secretly have been dating a manager in the company's information systems department. You and this manager always receive excellent performance reviews because you both are talented, experienced employees.When a company executive began asking questions about this romantic relationship, you both denied having a romantic relationship. In justifying your lying, you reasoned that the company had not suffered any harm so far, but it would sustain significant harm if it had to replace two valuable employees. You, of course, also would suffer tremendous harm if your lives were disrupted and had to find other jobs elsewhere. From the perspective of consequentialism, was it ethical for you to lie?

2. A corporation originally was formed with only common stock outstanding. If a company suffers financial distress or goes bankrupt, preferred stockholders receive full repayment of their investments before any amounts are paid to common stockholders.