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Anne Distagne was the CEO of Linkage Construction




Anne Distagne was the CEO of Linkage Construction;Inc., which served as the general contractor for the;construction of the air ducts for large shopping malls;and other buildings. She prided herself on being able;to manage her company effectively and in an orderly;manner. For years there had been a steady 22?25 percent;growth in sales, profits, and earnings per share;which she wanted to continue because it facilitated;dealing with banks to raise expansion capital.;Unfortunately for Sue Fault, the chief financial officer;the situation has changed.;?Sue, we?ve got a problem. You know my policy of;steady growth?well, we?ve done too well this year.;Our profit is too high: it?s up to a 35 percent gain over;last year. What we?ve got to do is bring it down this;year and save a little for next year. Otherwise, it will;look like we?re off our well-managed path. I will look;like I didn?t have a handle on our activity. Who;knows, we may attract a takeover artist. Or we may;come up short on profit next year.?;?What can we do to get back on track? I?ve heard we;could declare that some of our construction jobs are not;as far along as we originally thought, so we would only;have to include a lower percentage of expected profits;on each job in our profit this year. Also, let?s take the;$124,000 in R&D costs we incurred to fabricate a more;flexible ducting system for jobs A305 and B244 out of the;job costs in inventory and expense them right away.?;?Now listen, Sue, don?t give me any static about;being a qualified accountant and subject to the rules;of your profession. You are employed by Linkage;Construction and I am your boss, so get on with it. Let;me know what the revised figures are as soon as possible.?;Questions;1. Who are the stakeholders involved in this decision?;2. What are the ethical issues involved?;3. What should Sue do?


Paper#25577 | Written in 18-Jul-2015

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