Question

WEEK 6: QUESTION OF ETHICS, FRAUD OR BOTH? "I just provided the Chief Financial Officer with our projected sales for next year. I was very aggressive with the projections and know everything must work out perfectly for us to reach these sales projections. The CFO stated I needed to revise them upwards by 25% or I will be fired." We all know he is retiring in six months and I will be left holding the bag on these unobtainable sales projections. What do I do?"

Answer 1

Answer: This situation is a question of both ethics as well as fraud. Firstly it is unethical professionally to present inflated figures. Secondly presenting such inflated sales estimates will mislead the investors of the company and this may result inducing them to take wrong decisions that may prove detrimental for them in the long term. The inflated sales projection will also result in unrealistic targets for the employees who will have to run after unrealistic targets and this may de motivate them. Similarly when these inflated targets will not be achieved then there will be a negative feeling developed across the company which may result in the loss of job of certain people for non achievement of the goals. Thus it can be seen that the projected sales figures are used for making a number of critical decisions and inflating them will only benefit the CFO who is about to retire. Hence it is both unethical and fraud step that will mislead many important stakeholders of the company and result in negative consequences.