Accounting 260 Locker Room talk Ethics Stakeholder Impact Analysis.
Analyze the case using stakeholder impact analysis and the philosophical approaches to ethical decision making.
What should Albert do?
Albert Gable is a partner in a CPA firm located in a
small midwestern city which has a population of
approximately 65,000. Mr. Gable’s practice is primarily
in the area of personal financial planning; however,
he also performs an annual audit on the city’s
largest bank.
Recently, Mr. Gable was engaged by Larry and
Susan Wilson to prepare a comprehensive personal
financial plan. While preparing the plan, Mr. Gable
became personal friends of the Wilsons. They confided
to him that they have had a somewhat rocky
marriage and, on several occasions, seriously discussed
divorce. Preparation of the comprehensive
personal financial plan, which is nearing completion,
has taken six months. During this period, Mr. Gable
also performed the annual audit for the bank.
The audit test sample selected at random from the
bank’s loan file included the personal loan files of Larry
and Susan Wilson. Because certain information in the
loan files did not agree with facts personally known to
Mr. Gable, he became somewhat concerned. Although
he did not disclose his client relationship with the
Wilsons, he did discuss their loan in detail with a loan
officer. The loan officer is very familiar with the situation
because he and Larry Wilson were college classmates,
and now they play golf together weekly.
The loan officer mentioned to Mr. Gable that he
believed Larry Wilson was “setting his wife up for a
divorce.” In other words, he was arranging his business
affairs over a period of time so that he would be
able to “leave his wife penniless.” The loan officer
indicated that this was just “locker room talk” and
that Mr. Gable should keep it confidential.
Mr. Gable’s compensation from his firm is based
upon annual billings for services. If Mr. Gable
resigns as CPA for the Wilsons, it would result in his
losing a bonus constituting a substantial amount in
annual personal compensation. Mr. Gable is counting
on the bonus to contribute to support tuition and
expenses for his youngest daughter, who will be
starting as a freshman in college next fall.
To analyze the case using stakeholder impact analysis and the philosophical approaches to ethical decision making, we need to identify the stakeholders involved and evaluate the potential impact of different courses of action on each stakeholder.
Stakeholders:
1. Larry and Susan Wilson - The clients who have entrusted Mr. Gable with preparing their comprehensive personal financial plan.
2. Mr. Gable - The CPA partner who is friends with the Wilsons and has a professional obligation to maintain the confidentiality and integrity of his work.
3. The bank - Mr. Gable performs an annual audit for the city's largest bank, and his reputation and integrity are at stake in this situation.
4. Mr. Gable's firm - The firm where Mr. Gable is a partner, and his actions could impact the firm's reputation and relationship with clients.
5. Mr. Gable's youngest daughter - The bonus resulting from the completion of the financial plan could contribute to supporting her college tuition and expenses.
Philosophical approaches to ethical decision making that can be applied here include consequentialism, deontology, and virtue ethics.
1. Consequentialism: Albert should weigh the potential consequences of his actions on all stakeholders involved. He should consider the potential harm to Susan Wilson if her husband is indeed trying to "leave her penniless." Leaving the Wilsons without professional guidance may leave them vulnerable. Additionally, Albert should consider the impact on his relationship with the bank and his firm's reputation if he fails to address the potential ethical concern. Resigning from the Wilsons' case would result in the loss of the substantial bonus, potentially affecting his daughter's college expenses. Albert should evaluate the potential consequences of all available actions.
2. Deontology: Albert should consider his ethical duties and obligations as a CPA and partner in the firm. Maintaining client confidentiality and upholding professional integrity are core principles of the accounting profession. If Albert believes there is a risk of harm to Susan Wilson, he may have a moral duty to disclose his concerns to her. However, he should also ensure that any disclosures do not violate professional ethics or any legal obligations.
3. Virtue Ethics: Albert should reflect on his own personal values and virtues, such as honesty, trustworthiness, and fairness. He should consider the potential harm to Susan Wilson and evaluate how his actions align with his own moral compass. Acting in a virtuous manner may involve taking appropriate steps to address the potential ethical concern without compromising professional integrity.
Ultimately, what Albert should do depends on his own judgment and decision-making process. He may consider seeking guidance from the accounting profession's ethical standards, consulting with colleagues or mentors, or seeking legal advice to ensure compliance with applicable laws and regulations.
To analyze this case using stakeholder impact analysis and philosophical approaches to ethical decision making, we need to consider the stakeholders involved and their potential impacts, as well as the different philosophical perspectives on ethical decision making.
1. Stakeholder Impact Analysis:
Stakeholders:
- Albert Gable (CPA partner)
- Larry and Susan Wilson (clients)
- Loan officer
- Albert's firm
- Albert's youngest daughter (college expenses)
Impact on stakeholders:
- Albert Gable: The decision he makes will affect his professional reputation, personal financial well-being, and relationship with the Wilsons.
- Larry and Susan Wilson: They have entrusted Albert with their personal financial information and may be affected emotionally and financially if Larry is indeed "setting his wife up for a divorce."
- Loan officer: He inadvertently shared confidential information and may face professional consequences.
- Albert's firm: They rely on the successful completion of client engagements and may be impacted if Albert resigns.
- Albert's youngest daughter: She may rely on the bonus for financial support in college.
2. Philosophical Approaches to Ethical Decision Making:
- Utilitarianism: Albert should consider the greatest overall happiness for the greatest number of people. He should weigh the potential negative impacts on Larry and Susan Wilson if he does not take action, as well as the potential negative impact on his daughter if he resigns and loses the bonus.
- Deontological Ethics: Albert should act based on moral principles and his duty as a CPA to maintain client confidentiality. He must consider the trust and privacy expected by clients and respect their autonomy.
- Virtue Ethics: Albert should act in a way that aligns with his personal virtues and professional integrity. He should prioritize honesty, fairness, and responsibility in his decision-making process.
Taking both stakeholder impact analysis and philosophical approaches into account, Albert should consider the following options:
1. Maintain Confidentiality: Albert could choose to honor the loan officer's request and keep the information confidential. This would protect the privacy of the Wilsons but could potentially result in harm to Susan if Larry is indeed setting her up for divorce.
2. Inform the Wilsons: Albert could inform the Wilsons about the conversation with the loan officer and the concerns raised. This would empower the Wilsons to make informed decisions about their financial future but may strain his relationship with Larry and Susan.
3. Consult with Colleagues: Albert could seek advice from colleagues or superiors within his firm to gain different perspectives and guidance on how to handle the situation while maintaining ethical standards.
Ultimately, the decision on what Albert should do depends on his personal ethical framework and the values he holds. It is important for him to consider the potential impacts on all stakeholders involved and make a decision that aligns with his professional obligations and personal integrity.