Natalie Allen, senior lecturer in accounting

Principles of Managerial Accounting

Part one in a series of faculty-written pieces that underscore how to bring ethics education to light for Mays students.

As we discuss various topics in the Principles of Managerial Accounting course, I strive to introduce the importance of ethics in the management decision-making process. Students are required to analyze ethics cases that contain typical ethical dilemmas and are asked to describe the ethical issues involved.

Students must then identify the people affected by any decision that is made and, finally, decide on an appropriate course of action.

In one example in the context of learning about the budgeting process, students must consider a case in which an error is detected in a hastily prepared sales projection that causes the sales and income projections to be grossly overstated. To complicate the situation, the error is detected after the president of the company has made speeches to several brokerage firms regarding sales and income projections for the company.

Clearly, disclosing the error could affect the employee's future at the company, but what about the effects on the stock market and individual stockholders?

Another case has students consider a request to alter a management report that would effectively increase bonuses for managers of one division, but potentially cause the closing of another division. A higher bonus is appealing, but what about the other employees who may be out of a job?

This case-based methodology asks students to put themselves in a realistic situation and consider the real people who are affected. Students begin to realize that ethical dilemmas can emerge from what is seemingly a minor decision and that unethical decisions affect a wide array people from employees to customers to current and future stockholders.

At the sophomore level, my goal is to begin to raise awareness of the ethical dilemmas students may encounter when they leave the college classroom. When students consider business ethics in their early business courses, it provides a base that can be expanded upon as they move into their upper-level business courses and the business world.