This paper concentrates on the primary theme of Ethics Case study in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 45. For more details and full access to the paper, please refer to the site.

Ethics Case study

As you read and begin to formulate your answers to the required questions, you need to make sure to do the following:

1) Identify the key problem(s) and issue(s).

2) Identify possible alternative points of view. There is no one right answer for a case study.

3) Provide your specific solutions. Explain your reasoning. Support your answers with appropriate evidence.

Needs to be 1-2 pages single spaced. APA format

See attached file for case study and questions

REQUIREMENTS

1) Identify all the stakeholders impacted by Roger’s
decision.

2) Identify the ethical conflicts faced by Beth Sullivan in
this case.

3) Did Beth Sullivan act
ethically? Why or why not?

CASE STUDY

Roger McDaniels sat in front of
his computer pondering his immediate future. He had just finished an impromptu
meeting with Beth Sullivan from the internal audit department and his
confidence was shaken. Both Roger and Beth left the meeting wondering if their
recent decisions were for the best.

Roger’s accounting career began
approximately ten years ago when he became a CPA. Over the last decade, Roger
had been successfully employed in a variety of accounting positions. It
therefore came as no surprise to Roger when three months ago, he was contacted
by an executive recruiter and offered the CFO position at Solodor
Pharmaceuticals (SP). SP’s mission was to conduct tests on Celenza, a new drug
that had been developed to fight acute lymphoblastic leukemia. If successful,
Celenza had the potential to increase the average life expectancy of affected
patients by up to six years. Celenza offered terminal patients the most hope of
any drug in over a decade. Although not stated publically, it was known in the
industry that other pharmaceutical companies did not want to incur the
significant costs associated with developing a similar drug because sales of a
new drug would merely cannibalize sales from their current, but less effective
medications.

Upon accepting the employment
offer from SP, Roger felt very exhilarated. If SP’s mission was successful, not
only would Roger be handsomely rewarded (as his compensation package provided
him with numerous stock options, which in themselves would likely make Roger a
millionaire), but Roger would also play a part in extending the lives of
numerous terminally ill patients. Given the history of death in his family from
various forms of cancer, more specifically the death of his father from
leukemia when he was only a child, Roger was all too aware of the pain and mental
anguish associated with terminal illnesses.

Upon starting his new position,
Roger was not surprised to learn that, similar to other new pharmaceutical
companies, SP was currently experiencing severe cash flow problems. Thus, the
immediate priority for Roger was to procure a round of additional equity
financing. If Celenza was shown to be successful, it had the potential to be a
cash cow. However, in its current state, SP had no expectations of any Celenza
sales occurring for at least two more years because extensive testing was
needed before the FDA’s Center for Drug Evaluation and Research would even
consider approving the drug. Without obtaining a minimum of $5,500,000, SP
would run out of money and be forced to liquidate within the next four months. This
would not only leave Roger unemployed but would make his stock options
worthless. It would also put Celenza’s future in jeopardy.

Roger recently held meetings
with three different financiers and pessimistically awaited their responses.
Due to the weak economy, raising significant equity financing was an extremely
difficult task. Therefore, when Steve Butler called to arrange a breakfast
meeting, Roger was anxious.

Steve Butler was a senior
vice-president of Cambridge, a venture capital firm with access to over a
billion dollars. If SP’s management team impressed Steve, Roger knew the firm’s
current financial woes would be solved. However, if SP’s management team failed
to impress…well, Roger chose not to concentrate on that option.

The breakfast meeting between
Roger and Steve came and went with Steve appearing to be extremely intrigued
with the market potential of Celenza. At the end of breakfast, Steve suggested
that Cambridge would potentially be willing to invest up to $5,500,000 but only
after conducting a thorough analysis of Celenza’s research progress.

Accordingly, two weeks after the
breakfast meeting, scientists from Cambridge spent ten days examining the
research that SP had conducted to date on Celenza. Roger was feeling cautiously
optimistic because Steve’s team seemed to be impressed. However, as weeks went
by Roger’s pessimism began to return. It had been three weeks since the team
had visited SP and Roger had yet to hear from Steve.

Two days later the phone rang in
Roger’s office. After realizing it was Steve calling, Roger attempted not to
act apprehensive. During the call, Steve explained that his firm was in the
process of preparing a share purchase agreement in which Cambridge would
purchase up to 55 percent of SP. Cambridge was willing to pay $100,000 for each
1 percent of SP ownership, conditional on obtaining a controlling interest in
SP. After hanging up, Roger exhaled deeply and exhaustively leaned back in his
chair as he considered Cambridge’s proposal. On the positive side, the news of
an equity purchase could not have come at a better time since SP’s creditors
were phoning daily requesting payment. On the negative side, obtaining the
required $5,500,000 meant Cambridge would effectively control SP. Cambridge had
a reputation for replacing the management teams in firms that it acquired and
for pursuing a high-price/low-volume marketing strategy. The possibility of
being fired would be catastrophic for Roger since he had to be employed by SP
for at least one year before his stock options would fully vest. Cambridge’s
marketing strategy would also be in contrast to the desires of SP’s current
management team who wanted to maximize profits—but also planned on being
socially responsible by implementing a low price/high volume marketing strategy.
Roger clenched his jaw in agony because he knew that a high-price/low-volume
strategy meant that Celenza would only be available to the wealthy and not
available to those who were covered by traditional health insurance policies.

After waiting a sleepless week
during which no draft agreement appeared, Roger became increasingly agitated.
Roger did not want to act hastily but after he could wait no longer he phoned
Steve’s office. Although Steve was out of the office, Roger reached Steve’s
assistant and asked to see a draft of the purchase agreement. The assistant
agreed to overnight a hard copy of the deal.

Upon returning from lunch the
next day, Roger noticed a UPS package resting on the corner of his desk. As he
tore open the document Roger’s heart palpitated with nervous excitement. As he
glanced over the first sheets he immediately noticed that this was not a draft
of the agreement between Cambridge and SP but a final copy of a deal between
Cambridge and Dugas Incorporated that was to be announced the next day.

Roger’s first instinct was to
throw away the draft without reading it because it was obvious to Roger that
Steve’s assistant had made a mistake and sent him a copy of the wrong deal.
However, curiosity got the best of Roger so he decided to read over the entire
document. Afterward, Roger checked the Internet for details of Dugas
Incorporated. There did not seem to be any public information available about a
deal between Cambridge and Dugas Incorporated. Now consumed with interest,
Roger noticed that Dugas Incorporated was currently trading on the New York
Stock Exchange at $3.14 per share, down from a yearly high of $28.45. He next
reviewed a few financial news articles that expressed concern regarding Dugas
Incorporated’s cash flow. The articles also expressed doubt that Dugas
Incorporated would be able to obtain the additional financing it needed to stay
afloat.

Roger reclined in his chair
realizing that he was privy to a very significant piece of information. In less
than 24 hours Dugas Incorporated would announce Cambridge’s investment. This
news was sure to have a significant impact on the price of Dugas Incorporated’s
stock. Roger contemplated just how high their stock price would go, maybe $10,
maybe $15, maybe even past its yearly high.

Roger could not believe his good
fortune. A grin slowly crept across Roger’s mouth as he accessed SP’s operating
account and used every last dollar to purchase 470,000 shares in Dugas
Incorporated. Roger was actually giddy with excitement and found that he could
barely contain himself. With the profits that SP would make once the news
regarding Dugas Incorporated went public, he had single handedly prevented SP
from surrendering control to Cambridge. He had never felt better about himself.
Roger was now fully confident that he would remain at SP long enough for his
options to vest. As Roger left his office that day he realized that his actions
would stop Cambridge from imposing a high-price/low-volume marketing strategy
on SP such that only the very wealthy could afford Celenza. Roger found it
satisfying to help people who so desperately needed it.

A month later, Roger’s actions
were discovered by Beth Sullivan, an internal auditor at SP, while performing a
routine test on a stratified sample of cash transactions. Beth discovered that
Roger used SP’s operating funds to purchase shares in Dugas Incorporated just
one day before the stock price skyrocketed. This discovery led Beth, who was
unsure if she should further investigate the transaction, to request an impromptu
meeting with Roger. Beth chose to discuss the situation with Roger rather than
her immediate superior because SP’s corporate structure was such that the head
of the internal audit department ultimately reported to Roger, the CFO.

The meeting had only begun when
Roger somewhat aggressively instructed her to simply drop the transaction from
her sample. To underscore his point he made sure to mention that he was her
boss’s boss, and ultimately the person in charge of the internal audit
department. Sensing that Beth was uncomfortable with his instructions, Roger
slumped forward exhaustively and elaborated on his heartfelt reasons for having
used corporate funds to purchase the shares in Dugas Incorporated. After her
meeting with Roger, Beth experienced an uneasy feeling in the pit of her
stomach.

It was now two months since
Beth’s meeting with Roger but Beth still felt queasy when she contemplated
Roger’s actions. She had lain in bed the previous night tossing and turning
unable to sleep. As she showered that morning she considered that it was
important to ensure that she acted legally in spite of ethicality. People were
thrown in jail for violating the law not for violating ethics. She resolved
that in spite of thinking that perhaps Roger had behaved ethically, she had to
behave rationally. If she reported Roger’s actions, there was no way by which
she could be held legally responsible for any of Roger’s actions. There was
also no means by which Roger or SP could fire her, for the Sarbanes-Oxley Act
of 2002 (SOX, U.S.
House of Representatives 2002) provided her with protection from their
retribution. She never realized that reading the Occupational Safety and Health
Administration (OSHA) fact sheet in SP’s lunchroom would help her resolve such
a significant dilemma. After many bored lunch breaks she could now recall the
fact sheet verbatim:

An employer covered
under SOX may not discharge or in any manner retaliate against an employee
because he or she: provided information, caused information to be provided, or
assisted in an investigation by a federal regulatory or law enforcement agency,
a member or committee of Congress, or an internal investigation by the company
relating to alleged mail fraud, wire fraud, bank fraud, securities fraud,
violation(s) of SEC rules and regulations, or violation(s) of federal law
relating to fraud against shareholders. (OSHA 2011)

As Beth arrived at work that
morning, after a brief stop at the local coffee shop, she confidently wrote a
letter to SP’s Board of Directors informing them of Roger’s actions.

Mark J. Mellon and Robert Marley (2013) Roger’s
Dilemma: A Situational Examination of Ethical Behavior in the Presence of
Internal Control Deficiencies. Issues in Accounting Education: May 2013, Vol.
28, No. 2, pp. 337-351