The Seduction of Arthur Thompson: An Instructional Case on Ethics in the Accounting workplace.(Instructor's Note)

CASE DESCRIPTION This case focuses on ethics in the workplace--principally on the types of ethical issues facing an employee dealing with the financial management of a business. It was designed to help the student realize the implications of decisions regarding ethics and to recognize the difference between legal issues and ethical issues. This case is not highly technical and would be appropriate for inclusion in an introductory accounting or finance course. The case was designed to be presented over a single one-hour class period with only minimal preparation outside of class. CASE SYNOPSIS The myriad of news stories that have dominated the financial press at the outset of the 21st century have demonstrated, more than ever, the need for higher ethical standards among professional accountants. Unfortunately, teaching ethics in the classroom does not always translate into higher ethics among graduates. Barriers to adopting classroom ethics in the marketplace center on two facts: 1) that real-world pressures influence ethical decisions; and 2) that most ethical dilemmas involve the gradual graying of standards rather than the radical overthrow of such standards. This case is a portrayal of a real-world situation where the main character was subjected to a series of ever-increasing ethical choices, while faced with severe financial consequences. Although the names and setting have been changed, the presented events mirror the challenges faced by the main character: Arthur Thompson. The case allows students to place themselves in the position of the main character, to make decisions, and to weigh the consequences of their actions. Each of the three ethical dilemmas faced by the main character is followed by instructional questions that help the students identify the differences between legal and ethical issues, create a framework for making ethical decisions, and recognize the impact of competing motivations. INSTRUCTORS' NOTES This case was written with the intent that each section of the case be handed out and studied individually. After the section is read, the students should take the time to discuss the questions before proceeding to the next section. Particular attention should be given to the differences between legal standards and ethical standards, and on the consequences of each potential choice. Encourage the students to come up with their own creative choices. After reading the conclusion of the case, take time to focus on the transformation of the main character from someone of high integrity, to someone who had compromised his standards. With perfect hindsight, should Artie have made a different decision at the first indications of unethical behavior? If so, at what point should a person quit his or her job in protest against unethical or illegal behavior? It is important for the students to understand that these are not easy choices. To get the full impact of the case, it is important that the students realize that the events in the case are true; only the names and locations have been changed to protect the identities of the participants. The students must realize that they will face ethical dilemmas in the workplace. Further, the choices they make are not sanitary choices between right and wrong where the only consequence is whether or not their integrity is sacrificed. In the real world, such choices may have severe effects on the victim's career, family and financial condition. Further, note that never once did Artie receive financial reward for sacrificing his integrity. Many students have the false impression that individuals engage in fraudulent activities to secure unearned financial rewards. In reality, many frauds are perpetrated just to allow employees to maintain their job, even when their performance is such that the job is deserved and the compensation received is fair given the labor performed. One of the key points of this case is that what is legal and what is ethical are frequently two separate issues. …