Homework

This is Homework Assignment #3. It is a citation from our textbook, CaseBYP5-7, page 197. You are expected to prepare answers for the questions.

You are expected to write short 2-3 paragraphs, providing your answer and supporting it with your arguments.

Scott Bestor is an accountant for Westfield Company. Early this year, Scott made a highly favorable projection of sales and profits over the next three years for Westfield’s hot-selling computer PLEX. As a result of the projections Scott presented to senior management, the company decided to expand production in this area. This decision led to dislocations of some plant personnel who were reassigned to one of the company’s newer plants in another state. However, no one was fired, and in fact the company expanded its work force slightly.Unfortunately, Scott rechecked his computations on the projections a few months later and found that he had made an error that would have reduced his projections substantially. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its decision. Scott, however, is not sure what to do. Should he confess his honest mistake and jeopardize his possible promotion? He suspects that no one will catch the error because sales of PLEX have exceeded his projections, and it appears that profits will materialize close to his projections.

Instructions:

(a) Who are the stakeholders in this situation?

(b) Identify the ethical issues involved in this situation.

(c) What are the possible alternative actions for Scott? What would you do in Scott’s position?”

Weygandt, Jerry J. Managerial Accounting, 6th Edition International Student Version. Wiley, 2/2012. VitalBook file.