Assignment Task:
Present and justify your own view as to how Robert Wallace should resolve the dilemma in which he finds himself 800 words.
Robert Wallace graduated from Indiana University in 2008 with a BA in history and certification to teach high school social studies. He went right to work as a teacher, but after a few years he found himself increasingly frustrated with his work from the standpoint of both professional fulfillment and financial reward. With his wife's encouragement, he returned to school to seek an accounting degree. Karen Wallace is an RN, and she and Robert felt that her earnings as a nurse would suffice for themselves and their two children until he was ready to return to the workforce.
Robert finished his MBA in 2017, but his search for a position went slowly, partly because of the recession but also because, at age 35, he was a good deal older than those he was competing against. After a succession of part-time bookkeeping jobs, he finally landed a solid position with the accounting firm of Charles Caldwell and Company. He was assigned to the Caldwell office in Hamilton, Indiana (population 35,000). Besides
Robert there is just one other accountant in the office: Jerry Bragg, who is a partner in the company and thus Robert's boss.
Charles Caldwell and Company is a long-established firm, which is still run by its 74-year-old founder. It has traditionally been strong throughout Indiana but in recent years has faced tough competition from the big national accounting firms. Just last spring Mr. Caldwell summoned all of the partners to a meeting in which he reviewed the situation.
His words were relayed down to Robert and all of the other employees. "The only way we can beat this competition," said Mr. Caldwell, "is to provide more personalized and diligent service. This will be appreciated, especially in the smaller towns. Our survival depends on the local offices' keeping their customers happy."
All these events provide the background to the painful dilemma in which Robert Wallace now finds himself. Several weeks ago he conducted an audit of a local tractor dealership.
This was his first major project, which he was to handle on his own. The majority owner of the dealership is one Stanley Bigelow, who is also the president and chief shareholder in the local bank. Mr. Bigelow, a lawyer, has an interest in several other businesses as well. By any reckoning he is the richest and most powerful man in town.
Robert was extremely meticulous. As he went through the dealership's financial records, he found a very disturbing picture. Sales were way down, and the business was substantially in debt to the manufacturer who supplied its inventory. Several employees had been laid off, and the company was barely able to make its payroll to those remaining.
Among the documents Robert reviewed was an application for a very sizable loan. The bank from whom the loan was sought was the local bank of which Bigelow is president. The tractor dealership was in dire need of this loan in order to stave off bankruptcy.
Indeed, the dealership was in such bad financial shape that under any normal circumstances, it would not be able to get a loan. It became clear to Robert that the main reason his firm had been hired to audit the dealership was to provide a favorable picture of its condition, so that a loan could be obtained. But Robert saw that his audit would have to be anything but favorable. Robert brought the disturbing news to Jerry Bragg. His superior's reaction shocked him.
He was ordered to drop the matter. "I will take over the audit of the dealership," said Bragg. "I will talk to Bigelow. We will have to gloss over the dealership's problems. Since Bigelow runs the bank, we can be sure that the audit will not be scrutinized too closely. It has to be handled discreetly. We cannot afford to alienate Bigelow, or we will be out of business in this Town."
Robert protested that it is not an accountant's job to "gloss over" things but rather to certify financial soundness or (as in this case) the lack of it. But Bragg cut him short:
"I'm in charge of this office. It's my responsibility, not yours. If you intend to keep working for this company, then you stay out of this matter, starting right now."
Without saying anything more, Robert left Bragg's office. He had no idea what he should do. He hated the thought of losing this job. Should he "blow the whistle"? If so, to whom? How far was he obliged to carry it?