Question

Betty has finally returned to her job as an accountant at Blue Chip Enterprises, a small family run hardware supplies chain, after a five-year extended maternity break. She has returned at an important time in the fiscal year: tax season. As she reviews the books for the period she was, she notices little anomalies, which suggest that Blue Chip has been reporting much less income than they have actually made in the last two years. gone, Troubled by this, Betty approaches the company owner, Mr.Asamoah, who comes clean and explains that he has been altering the books because of a personal financial slump that he fell into because of a gambling problem. Mr.Asamoah promises that from now on, now that Betty is back, he will no longer attempt to reduce his tax liability because he and the company are in a better place now. However, he also makes clear to Betty that he can not afford to pay the back taxes and their penalties. If Betty reports the fraud to the tax authorities, the company may close. If it comes out that she did not report it, she will lose her license. Questions a) What are the main ethical issue(s) in this scenario? b) Set out the possible courses of action open to Betty c) Assess these alternatives using ethical theories familiar to you d) What should she do, and why?​

Answer 1

Answers added to the explanation

Step-by-step explanation:

a) The main ethical issues in this scenario are:

Honesty: Blue Chip Enterprises has been intentionally falsifying its financial records to avoid paying taxes, which is not only illegal but also unethical.

Loyalty: Betty may feel a sense of loyalty towards Mr. Asamoah and the company, as they have given her a job and she may want to protect them from harm.

Responsibility: As an accountant, Betty has a professional responsibility to ensure that the financial records are accurate and truthful.

Justice: By not paying the correct taxes, Blue Chip Enterprises is not contributing its fair share to society, which is unjust.

b) The possible courses of action open to Betty are:

Report the fraud to the tax authorities, which would result in the company being investigated and potentially closed down.

Confront Mr. Asamoah and try to persuade him to pay the back taxes and penalties without involving the authorities.

Ignore the situation and continue with her job, knowing that the financial records are inaccurate and that she may be at risk of losing her license if the fraud is discovered.

c) The possible courses of action can be assessed using various ethical theories:

Utilitarianism: This theory would suggest that Betty should report the fraud to the tax authorities, as it would result in the greatest good for the greatest number of people (i.e., society as a whole would benefit from Blue Chip Enterprises paying its fair share of taxes).

Virtue ethics: This theory would emphasize Betty's responsibility as an accountant to be honest and truthful in her work, and to act with integrity even when it is difficult or unpopular. It would also recognize the importance of loyalty, but not at the expense of honesty and integrity.

Deontological ethics: This theory would emphasize Betty's duty to report the fraud, as it is her professional obligation to ensure that the financial records are accurate and truthful. It would also recognize the importance of justice, as all individuals and companies have a duty to pay their fair share of taxes.

d) Based on these ethical theories, Betty should report the fraud to the tax authorities. While this may result in negative consequences for Blue Chip Enterprises and Mr. Asamoah, it is the right thing to do in order to ensure that the company pays its fair share of taxes and that Betty upholds her professional responsibilities as an accountant. While loyalty and personal relationships may be important, they should not override Betty's ethical obligations to society and her profession.