Ethics Case (Accounting) - SEE ATTACHMENT Gena Schmitt and Riverside Bottling.

You are the assistant controller in charge of general ledger accounting at Riverside Bottling Company. Your company has a large loan from an insurance company. The loan agreement requires that the company's cash account balance be maintained at $200,000 or more, as reported monthly.

At June 30 the cash balance is $80,000, which you report to Gena Schmitt, the financial vice president. Gena excitedly instructs you to keep the cash receipts book open for one additional day for purposes of the June 30 report to the insurance company. Gena says, "If we don't get that cash balance over $200,000, we'll default on our loan agreement. They could close us down, put us all out of our jobs!" Gena continues, "I talked to Oconto Distributors (one of Riverside's largest customers) this morning. They said they sent us a check for $150,000 yesterday. We should receive it tomorrow. If we include just that one check in our cash balance, we'll be in the clear. It's in the mail!"


(a) Who will suffer negative effects if you do not comply with Gena Schmitt's instructions? Who will suffer if you do comply?

(b) What are the ethical considerations in this case?

(c) What alternatives do you have?

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...may have an issue if her superiors focus on the issue. She is compromising the ethics and integrity of the company by her actions. It would be far better to discuss it with the lender and upper management to arrive at a solution that is more honest and straightforward. From the perspective of the lender, they might rather like to know than be deceived.

(b) What are the ethical considerations in this case?

The ethics in this case have to do with a breakdown of company policy, honesty and integrity. It may seem like a small thing but if I were the assistant controller, I could be asking myself what she might do next.

The second issue that will arise is that if one person gets away with a 'slip up', then another employee will remember that action and decide that he or she can also get away with a little 'slip up' because it has been ...