Ethics Review Facts You Are Now A Manager At A Second-Tier C

Ethic Reviewfactsyou Are Now A Manager At A Second Tier Cpa Firm You

Analyze the ethical issues, options, arguments, and decision-making processes involved in Con-way Inc.'s case regarding FCPA violations related to improper payments at its subsidiary Emery Transnational. Your analysis should follow a structured five-step process, including issue identification, outlining response options, constructing ethical arguments, evaluating these arguments, and making a final ethical recommendation. Embed this analysis within a comprehensive academic paper of approximately 1000 words, citing at least five credible references according to APA style. Use clear, formal, and scholarly language, and ensure proper citation of sources within the text.

Paper For Above instruction

The case of Con-way Inc. presents a compelling ethical dilemma rooted in the company's failure to maintain adequate internal controls and its involvement in illegal foreign payments under the Foreign Corrupt Practices Act (FCPA). This analysis follows a five-step framework to critically examine the ethical issues, explore possible responses, construct moral arguments, evaluate these perspectives, and ultimately recommend an ethically sound course of action.

Step 1: Identify the Issues

The primary ethical issues in this case involve Con-way’s deliberate or negligent failure to prevent its subsidiary, Emery Transnational, from engaging in corrupt practices such as making illicit payments to foreign officials. The major factual issues include the scope, amount, and nature of the payments—totaling at least $417,000—made to officials at the Philippine Bureau of Customs and various airlines to obtain favorable treatment. The accounting issues revolve around the company's failure to record these payments accurately, violating SEC regulations and accounting standards. Stakeholders impacted include Con-way senior management, shareholders, employees, international officials, and the affected Filipino government agencies. Con-way’s shareholders and employees are affected by the company's legal penalties and reputation, while foreign officials and government agencies are directly involved through their illicit interactions with the firm.

Step 2: Outline the Options

Responding to the ethical issues, Con-way could have taken various actions. Firstly, it might have implemented stronger internal controls and oversight over Emery Transnational and other foreign subsidiaries to detect and prevent corrupt practices. Alternatively, the company could have engaged in proactive training and a culture emphasizing compliance and ethics, reinforcing legal standards among employees. A different option involves conducting thorough internal investigations upon initial suspicion, cooperating fully with regulators, and voluntarily disclosing violations—actions aligning with corporate social responsibility and best practices. Some might argue for maintaining the status quo, primarily focusing on financial reporting and avoiding legal trouble, but this ignores ethical obligations and potential long-term consequences for trust and reputation. Recognizing the lack of comprehensive oversight and internal controls presents an opportunity for reform and stronger corporate governance.

Step 3: Construct Ethical Arguments

The ethical principles relevant to this case include deontology (duty-based ethics), virtue ethics, and justice. Under deontology, Con-way had a moral duty to comply with laws governing international trade and anti-bribery statutes such as the FCPA. Virtue ethics emphasizes qualities like honesty, integrity, and responsibility—traits that weren’t demonstrated in concealing illicit payments. Justice concerns involve fair treatment and the obligation to uphold legal standards that prevent corrupt practices, especially when they distort economic competition and undermine fair governance. Additionally, accounting principles such as the SEC’s rules on accurate books and records and the requirement for effective internal controls are grounded in both legal and ethical standards—highlighting that transparency and accountability are fundamental obligations. The convergence or divergence of these principles underscores the conflicting pressures and responsibilities faced by corporate managers in such contexts.

Step 4: Evaluate the Arguments for Each Option

When assessing the options, the strongest ethical argument favors transparency, compliance, and accountability. Implementing stronger internal controls and monitoring systems aligns with the duty to prevent illegal activities and uphold integrity; it also furthers virtues such as honesty. Conversely, neglecting these controls, whether intentionally or negligently, results in ethical violations and potential legal sanctions, ultimately damaging stakeholder trust. The argument for proactive disclosure and cooperation with authorities is compelling, as it reflects moral responsibility and virtues of honesty and humility in corporate stewardship. However, adopting a more punitive approach—merely avoiding detection—serves self-interest but conflicts with ethical standards that prioritize justice and obedience to law. An examination of unwarranted assumptions reveals that simply increasing oversight without cultural change may be insufficient; thus, fostering an ethical corporate culture is essential for sustainable compliance.

Step 5: Make a Decision

Based on the analysis, the most ethically justifiable action involves recognizing the misconduct, implementing comprehensive internal controls, and proactively cooperating with regulatory agencies. Such measures reflect a commitment to transparency, responsibility, and justice—core ethical values. A critic might argue that disclosure could harm company competitiveness or shareholder interests; however, these concerns are outweighed by the moral imperative to uphold legal standards and corporate integrity. Rebutting such arguments involves emphasizing that ethical lapses pose long-term risks of legal penalties, reputational damage, and stakeholder attrition, which ultimately threaten the company's sustainability. In conclusion, Con-way’s leadership should prioritize restoring ethical standards through accountability, enhanced controls, and cultural change, aligning business practices with moral and legal responsibilities.

References

  • American Bar Association. (2012). Foreign Corrupt Practices Act: A Comprehensive Guide. ABA Publishing.
  • Carcello, J. V., & Nagy, B. (2004). audit committee characteristics and audit fees. Auditing: A Journal of Practice & Theory, 23(2), 13-26.
  • Crane, A., & Matten, D. (2016). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press.
  • SEC. (2008). In the Matter of Con-way Inc., Accounting and Auditing Enforcement Release No. 2867. [PDF document]. Retrieved from https://www.sec.gov/litigation/admin/2008/34-58671.pdf
  • Werhane, P. H., & Freeman, R. E. (Eds.). (2008). Business ethics: Ethical decision making & cases. Pearson Education.
  • Wallace, J., & Randels, B. (2011). Ethical challenges in international accounting and auditing. International Journal of Business and Social Science, 2(16), 87-94.
  • Transparency International. (2022). Corruption Perceptions Index. Retrieved from https://www.transparency.org/en/cpi/2022
  • Gillett, R., & Scavarda, A. J. (2018). Ethics and compliance in supply chain management. Journal of Business Ethics, 152, 635-648.
  • Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business Ethics Quarterly, 23(1), 97-124.
  • Rousseau, D. M. (2001). Developing legitimate management practices. Academy of Management Journal, 44(1), 71-84.

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