Use the following 4-step approach when analyzing ethical issues and case studies. 1. Identify the ethical issue(s)

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Question:

Use the following 4-step approach when analyzing ethical issues and case studies.

1. Identify the ethical issue(s) noted in the reading. Isolate the true issue or issues.

2. Identify the stakeholders - who are the individuals impacted by the issue?

3. List at least three possible courses of action and describe how each will affect the stakeholders identified in step 2 above.

4. Determine which course of action you would choose and why. Which stakeholders are served? Ethical Issue:

As controller of XYZ, Inc, you discover an error in the company books that overstates the company's net income and balance sheet for the prior year. The financial statements have been distributed to external users, banks and other creditors, for about two months when you catch the error. You don't want to tell the CEO of the company, but finally get your courage up. When you tell her, she simply says, "Don't worry about it - the statements have already been released. We will just fix the error in the current year and no one will be the wiser. Please make sure to be careful in the future that this does not happen again!" (Adapted from Weygand, Kimmel & Kieso, 2015). As the controller, what would you do?