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Group Case Analysis Requirements The following format is REQUIRED for all case analyses

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Group Case Analysis Requirements

The following format is REQUIRED for all case analyses. Do not change the order of these items.

Group Case Analyses Required Format:

Cover Sheet

Include the group number, the course section and the names each student who contributed to the paper. Present this information vertically, with each student's name on it's own line in alphabetical order. Please include the information in that order and do not add any other information. If a student did not participate with the group, then do not include their name on the cover sheet.

Facts

Briefly specify the relevant facts of the case.

Issues

Identify all of the operational, behavioral, ethical and accounting issues that are important in the case. You will have multiple issues in each catagory.

Possible Courses Of Action

Identify all of the realistic courses of action to resolve the issues in this case. Put yourself in the place of the principal player in the case. Analyze each course of action and evaluate the consequences of each action from the perspective of the principal player.

Best Course Of Action

After evaluating each alternative, decide on a course of action and RECOMMEND your choice. You must make a choice as to which course of action should be pursued and state the reasons why this course of action is the best one for the case.

Additional information for writing the case analyses:

• Write in the third person. Do not use ‘I’ or ‘me’ when writing this paper.

• You are writing this analysis to a busy executive in your company. That applies to the tone, content, approach and organization.

• Use business terms, not street or conversational structures.

• Use spell check. Spelling and sentence structure is important in your business writing. Poor grammar and spelling distracts from your message in the eyes of the reader. Your score on each paper will reflect your English writing ability.

• Submit your paper in Microsoft Word. This will eliminate downloading and printing problems.

• Font: Arial 11 point

• Spacing: double space

• Margins: Normal (1 inch)

• Indent the first line of each new paragraph

• Total number of pages (not including the title page) should be no less than 5 pages.

• Number your pages at the bottom center.

• No headers or footers (no footers other than the page numbers at bottom center).

• No graphics, tables, figures or bullet point lists on any of the pages including the title page. (You may use a bullet point list to provide the names of the members of your group on the title page).

• If you have used the “Track Changes” feature, please make sure it is turned off before you submit it.

• Indicate your Group number when naming the Word document (for example Group 1 Case Analysis.docx) and on your title page.

 

 

 

"Will you change my W-2 form to show that I've used my car for business use?" John, the EVP of ABC, asked Bill, the company controller. Although Bill handled many personal requests for the EVP, this request didn't sound quite right. It had been a busy day at ABC, an international automotive parts supply company, and Bill's thoughts were burdened with his responsibilities. As controller of a $550 million company, Bill had to juggle many tasks using his knowledge of ethics and his natural inquisitiveness. He took his job seriously and knew that his signature on company documents meant that he was not only aware of the company procedure but approved of it.

One thought troubled Bill. John Smith didn't turn in any business miles. All of the miles he drove in his company-provided vehicle were considered personal for accounting's sake, Bill mused. The W-2 form reflected 100% of his personal use, so there was nothing to change. Bill considered the EVP's tenure and authority at ABC.

Smith had been with ABC for the past 30 years and was the highest-ranking officer in North America. Perhaps Bill could take a look at his expense reports and ascertain an acceptable legal number of business miles based on gas receipts turned in. Upon initial review of 2010 expense reports, Bill discovered a startling truth: flagrant discrepancies. Not only had John expensed original gas receipts, but there were duplicate, triplicate and, in some instances, quadruple copies of gas receipts occurring on the same day, at the same gas station, at the same pump number with purchases taking place just moments apart from one another.

How could this be? Bill thought. For goodness sake, John only had one car! Even if John was gassing up his and his wife's car, ABC's policy strictly prohibited expensing gas for any vehicle other than a company car. This caused Bill to look further. When he did, what he found was shocking. Bill had to entrust this information to the ethics officer of ABC.

"Don't worry, it can't be that much," smirked the ethics officer, Mike Thompson. Bill had only begun to report his findings, beginning with John's reimbursement for fraudulent gas expenses, and Mike's response had shocked him. Bill realized that Mike considered the gas expense discrepancies to be small in the grand scheme of business at ABC. However, it bothered Bill to think that standards were strictly enforced just a couple of months ago when an employee had been terminated for misuse of company funds. Were the executives at ABC above the law? More troublesome, now that Bill was privy to the apparent favoritism shown to executive officers, how could he, as controller, condone or approve of such practices? He didn't approve at all, and in fact, he was infuriated.

"But Mike, there's more, " Bill sputtered. The questionable gas receipts had led Bill to search expense reports for the past three years, where he had found personal dinners charged to ABC, personal items claimed as business gifts and false reporting of travel and entertainment receipts for dinners and lunches that never took place. (Further examination also uncovered up to three weeks' vacation a year that was never reported to human resources and payroll, thereby allowing John time off with pay, as well as requests to be paid for his accrued but "unused" vacation at the end of each year.). Mike Thompson stared blankly at Bill as the facts were presented.

"Well," Mike said, shrugging. Bill realized that this was a touchy situation that needed to be handled carefully. He wondered whether a veteran like John Smith would be held accountable or even reprimanded for his actions. What made Bill boil, however, was the lack of concern and downright flippant manner in which this information was being received by the ethics officer of a company of ABC's stature. Bill couldn't believe Mike could react this way. It started to make sense, though, when he remembered that Mike Thompson reported to John Smith.

"Whatever you do," remarked Mike, "just don't report this to the president."

Bill had to think quickly. Do I dare tell him? Bill thought to himself. Only a month ago, John had asked Bill to create a new company organizational chart that eliminated Mike's position. When Bill told Mike, he was shocked. Suddenly ethics were very important to him.

"Bill," he said, "go through John's expense reports for the past three years. I want to see it all! We're going to have to do something about this." Bill felt sick at this newly found enthusiasm for justice.

"Let's see. Monday, January 13, lunch at Oscar’s, a credit card receipt. January 20, lunch at Oscar’s, a blue cash receipt. February 10, which happened to be a Saturday, lunch at Oscar’s, a pink cash receipt," Bill recalled out loud. Many years of auditing experience had taught him to notice little red flags such as these. Bill went to lunch at Oscar’s and simply asked the manager what type of cash receipts they used.

"We only use brown receipts and have only used brown receipts for the last five years," the manager told Bill. Bill presented the blue and pink receipts and the manager emphatically told Bill that these were not his restaurant receipts. It appeared that John handwrote false receipts to receive reimbursement. Bill continued to dig deeper, thinking it very fortunate that he had a copy of the EVP's personal calendar. John had given Bill a copy a few months earlier so that Bill could schedule meetings. Having this tool made it easy for him to compare the personal calendar with the calendar John gave his own secretary. In fact, it showed Bill that John was indeed keeping two separate calendars. How was it possible, for example, that John could be entertaining clients at Los Angeles' finest Italian restaurant-as his business calendar claimed--as well as attending his daughter's birthday party hosted at the same restaurant-as his personal calendar said? Did he run back and forth between tables like the character in "Mrs. Doubtfire"?

Bill also uncovered dinner receipts expensed to the company that betrayed interesting information, such as four bottles of wine (to entertain clients) totaling $395 were purchased to go. There was no other receipt showing that dinner was purchased that evening. Did John entertain these guests at his home? Bill wondered. It was possible; however, more than twenty other receipts had proved client entertainment usually took place at the restaurant.

Then there were the business expenses on Saturdays and Sundays. Bill knew the EVP never did business on the weekends because he always spent time with his children. Questions about whether John's actions were deliberate or accidental and coincidental were answered after three months of digging into stacks of expense reports. Bill felt that he had enough evidence to prove fraud.

But it wasn't that simple. In a perfect world, unethical behavior would be dealt with, ethics officers would enforce standards and employees who didn't follow those standards face the consequences. However, due to John's tenure with the company there was a possibility that this whole incident might be swept under the rug.

"After all," Mike said, "John has done an excellent job during his thirty year career at ABC."

Bill was furious. He still had a W-2 deadline to meet and was determined not to change the W-2 amount. If he did, he would be acting outside of his professional standards and allowing one person, although it was the EVP, a benefit not legally available to all other employees.