Read the attached case study and write professional one-page written executive summary. The summary should include a discussion of the ethical concerns, your response, and how you how you would provide executive guidance.
Brenda Williams
Brenda sighed as she looked at the pile of forms on her desk. How on earth
could she get through them all and get away for lunch with Bill? Bill was
another co-op student working in internal audit. While they both were at the
University of Waterloo, Bill had worked at Upper Latitude Telecom for four
work terms, and this was Brenda’s second work term. They had met just 3
months ago at a reception the firm had held in honour of their 25 co-op
students. Bill had become a regular lunch date since then, and Brenda was
interested in developing their relationship further back on campus. This
lunch was particularly important for Brenda since she was upset and needed
to talk to someone she could trust.
Brenda was in her second year of Management Accounting and this was her
first employer. She had done well in her first work term, and had received a
promotion to her current role in Marketing Admi nistration. In this position,
she had the task of recording and managing the department’s personnel
expenditure budget for client relations. With about 100 commissioned sales
engineers in the field, plus a home office staff of about 25, she had her hands
full.
When she was put into the position, she was excited. She had split reporting
responsibility. She was officially part of the controller’s office, but her
immediate supervisor was Joan Hatfield, VP of Sales. Joan was a very active
and successful people manager, and had attracted a number of excellent
salespeople to the department over the past two years. She was not at all
interested in the administration of the department, and particularly the
expense reports of the sales staff. Brenda remembered her interview with
Joan clearly. Joan’s words described a position that Brenda craved: “I want a
person who works in a team with the rest of us. Someone who can make
things happen, can handle issues independently, and who completes tasks
quickly and efficiently. I don’t want them in my office, and I hate discussion
on little issues. You’ll have to work with the sales people who are
primadonas and colourful….but they’re effective. We have to clear the
roadblocks out of way. I see you as a offensive blocker, clearing the
administrative path.”
When the details of her job had been outlined, Brenda was required to
manage all the purchases for the department, organize conference and
selling functions, and administer the expenses for all staff people. Joan had
been very clear where her personal priorities lay: “I sign for all the vouchers,
but I don’t look at them. Where there’s a problem, work it out with the
person. This is the part of the job I hate the most.”
The first 2 months of the job had been very exciting. There had been a major
promotional effort in Toronto, and she had been active in making it happen.
1/9/2019 Brenda Williams | Centre for Accounting Ethics | University of Waterloo
https://uwaterloo.ca/centre-for-accounting-ethics/resources/ethics-teaching-cases/brenda-williams 2/3
The quarter was coming up, and she was putting together the expense
statement of the entire department. Her only concern was wit h Harold
Freedman. Harold was the star salesman of the department. His sales had
already passed quota, and he was in the next level of commissions well
before the other staff. He was putting together a major sale in China, and he
had made two trips to the Far East so far this quarter.
His expense account was also major league. On the last trip, he had hired a
secretarial support staff person in Hong Kong, and had paid her $2,000 per
week plus full expenses. Other staff were whispering that the $2,00 0 a week
got Harold much more than typing services. Accommodation was always
first class, and the bar bills were staggering. When he was home, his
secretarial work was done by his sister – in – law, paid on a casual basis, at
rates well above prevailing expe nses. Recent expenditures included leasing a
bright red Porsche, although policy restricted salespeople to Chevy Luminas.
Travel was always first class, although on short trips company policy was
economy, and on long hauls, business class. Purchase of camera equipment
and projection equipment, etc were regularly part of the expense statement,
although these items rarely showed up at the corporate offices. Finally, per
diem allowances were always taken to the full, although there was separate
reimburse ment for all individual living expenses.
Company policy for reimbursement was quite strict according to the manual,
and was in fact adhered to by all the regular sales staff. On talking to Harold,
he had been very friendly. In fact, she had been invited out to chat with him
at one of the very expensive restaurants in town. He had been charming, and
explained that he needed to present an affluent image to get the big foreign
accounts. He further explained that this was now his second year with the
company, and there had been no problems with Alice, who held the position
before Brenda:
“Brenda, my dear, you are so conscientious. It’s a marvellous skill, that I just
don’t have and I really do need. When I get the promotion to Far East
Development Manager, I’m going to need a second-in-command like you. I
should tell you that Joan, when she hired me, gave me carte blanche in sales
expenses, so she knows what I’m doing. We’re really close on this.
Additionally, when this sale comes in later this year, there’ll be big bonuses
for all of us – maybe even you. By the way, I have a couple of tickets to the
new show this weekend, left over from our sales blitz. Maybe we could get
together with Bill and my wife Tracy, and do the town red to celebrate. After
all, we are part of a team…and yes, I’ll try to keep control over the costs.”
She had declined the invitation, but had put through the vouchers for
signature by Joan. Joan had commented on the high expenditure on the
summary statement, but did not investigate any further. She had
commended Brenda for her good work, and said she would nominate Brenda
for the work term prize offered by the company.
1/9/2019 Brenda Williams | Centre for Accounting Ethics | University of Waterloo
https://uwaterloo.ca/centre-for-accounting-ethics/resources/ethics-teaching-cases/brenda-williams 3/3
Next month’s expenses indicated that Harold had spent even more money
on questionable items. When she had asked him about the secretarial
expenditure, he had complained at length about the quality of service
available in the company. He also made it very clear that he was unhappy
about being challenged, and if this continued, he would discuss her
performance with Joan.
“Remember, Brenda, you’re here for only one more month. I was hoping that
you would be back, but I think that you don’t have the big perspective
needed for such a task.”
The conversation had been devastating to Brenda. She was now alarmed that
she had offended such an important person to the department, and she knew
that Joan would be unhappy with having to deal with the issue.
She glanced up at the clock: “Twelve o’clock and all’s not well.”
If you were Brenda, what would you do?