1

Executive Summary
Every company should have an equal opportunity employment
policy which is stated on the human resource management policy
of Red Ball Beverage Company. In one of their employee hiring
Processes Company’s controller D. W. “Butch” Laughton hired
five employees. Among the selected employees three were sons of
close friends of Laughton and no minorities. And the assistant
controller Jack Myers also interviews candidates and he felt that at
least two of the minority candidates were very well qualified and
the sons of Laughton’s friends were definitely not among the most
qualified. Where as a short list of thirteen from a total of 175
candidates had been interviewed. Laughton’s decisions violate
standards of competence and integrity. That’s why the decision was
obviously unethical.
And when Myers questioned Laughton concerning his reservations
about the hiring practices, he was told that these decisions were
Laughton’s and not his, so he should not question them. In that
situation Myers should send an explanatory memo to an
appropriate high-level official of the company. Otherwise he
should go to the only person external to the company with whom it
is appropriate to discuss this issue is a confidential objective
advisor.
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Table of Contents

Introduction……………………………..Page: 05

Theme………………………………….. Page: 06

Main Issue………………………………Page: 06

Analysis & Interpretation………………. Page: 07

Problems & Challenges…………………Page: 08

Conclusions & Recommendations……...Page: 09

A Select Bibliography…………………..Page: 10
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Introduction

Management accountants have an obligation to the organizations.

And they should serve mainly with the four standards of ethical
conduct. These are Competence, Confidentiality, Integrity and
Objectivity. Here in the case of employee hiring policy of Red Ball
Beverage Company; we find some inequality. Hiring in the
accounting department is done by the controller D. W. “Butch”
Laughton. The assistant controller Jack Myers also interviews
candidates, but Laughton makes all decisions. Once in a hiring
process Laughton hired five candidates from the short list of
thirteen candidates. Among five three were sons of close friends of
Laughton and no minorities. Where as according to Myers there
were very well qualified candidates (Two from minority) and three
sons of Laughton’s friends were definitely not among the most
qualified. So it is almost clear to us that Laughton’s decisions
violate standards of competence and integrity.
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Theme

The controller is the top accounting officer of an organization. If

we consider the four ethical conducts for Management Accountant;
we see that an appropriate level of Professional competence must
be maintained. Relevant laws, regulations and technical standard
must be followed that is called Competence. In the case of
Confidentiality Management Accountants must not disclose the
confidential information and he or she must do their duties
ethically that is Integrity. And Management accountants must
communicate information fairly and objectively. They must
disclose all relevant information that could reasonably be expected
to rightly guide the users in making decisions.

Main Issue

Our core focus is on the Company’s hiring process. Did they

(Controller and the assistant controller) follow all of the standards
of ethical conduct which are must be followed by Management
accountants?
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Analysis and Interpretation

Management accountants have an obligation to the organizations

they serve with the following standards: Competence,
Confidentiality, Integrity and Objectivity. In the case of Red Ball
Beverage Company controller Laughton’s decisions violate standards of
competence and integrity. Competence is violated because the most
competent persons were not hired. Integrity is violated because hiring was
done for the personal interest of Laughton at the expense of the company.
The practice threatens the company’s equal employment opportunity policy.
In the case of the assistant controller who also interviewed the candidates,
we can suggest the following steps. His first step should be to discuss the
situation with his boss. Since here his suggestion against the unethical act
was not earlier accepted by Laughton, he would need to go to Laughton’s
Superior. If the matter is not resolved he should continue until reaching the
president, if equal employment opportunity is the Company’s genuine
policy, the president should be very concerned about Laughton’s actions.
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Problems and Challenges

Problems are everywhere in the world. Nothing can be solved

without facing problems. In this situation if the matter not resolved
at this level, Laughton should go direct to the Board of Directors.
If at this level also Myers is not satisfied, he may have no resource
but to resign, sending an explanatory memo to an appropriate high-
level official of the company. On the other hand Myers should not
go to the press to disclose the matter so that press puts pressure on
the company, because this decision violates Confidentiality ethical
standard of the Management Accountants. In fact the only person
external to the company with whom it is appropriate to discuss this
issue is a confidential objective advisor according to the objectivity
standard of ethical conduct.
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Conclusions and Recommendations

Managerial Accounting is a part of an organization’s Management

Information System (MIS). Its objectives are to provide managers
with information for decision-making and planning and to assist
managers in directing and controlling operations. And motivate
managers toward the organization’s goals and measuring the
performance of managers and subunits within the organization.
Since the Controller is the top accounting officer of an
organization, he or she must follow up the standards of ethical
conduct for Management Accounting. Managers at all level and
other officials of an organization must not do any work that would
discredit the profession or the organization’s internal or external
environments. Finally we can propose that Laughton and Myers
should follow the Standards of Ethical Conduct to maintain the
equal opportunity employment policy. They should follow the rule
for the honor of their profession as well as for their organizational
standard.
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A Select Bibliography

Text book:
Horngren, Sundem and Stratton, 1999: Introduction to
Management Accounting, 11th edition, Upper Saddle River, New
Jersey: Prentice Hall
C 1: Managerial Accounting & the Business Organization: P 35

Class Lectures: (by)

Prof. Dilip Kumar Sen
Instructor, School of Business
Independent University, Bangladesh. (IUB)

Website (s):
www.thoracic.org/sections/ education/resources/cmetoolkit.doc

…………………………May God Bless You……………………..