What specific interests are in conflict?
The two groups of interest, in this case, are the management of the company and the potential investors. By including the $43,900 retainer fees as sales, the company will record a high sales revenue. The management can use the high sales posted to make a point that they have done well in advertising the business, increasing revenue. Another interest group is the investors who may be misled by this action to thin that the company is doing well. Retainer fees are not revenues until the service is rendered.
What are your responsibilities and obligations?
My responsibility and obligation are to maintain business ethical standards by advising the controller to exclude the $43,900 from sales until the services are rendered.
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Case Study 2
What rights or claims may be violated?
In this situation, the claim violated is the usage of information on stock security that is not publicly available for everyone. It gives undue advantage to the person the information is given because they will decide to buy stocks based on information not available for all. As rewired by the regulations, full disclosure is a requirement for any corporation, and no information should be disclosed only to a section of people.
What specific interests are in conflict?
The interest is for the insiders to benefit from the profit the company is predicted to make.
What are your responsibilities and obligations?
The obligation is to maintain the proper ethical expectations of a company. Insider trading in financial markets raises many issues. It brings up conflicts of rights, inequalities across the market participants, and differing cultural norms. The trade takes advantage of favorable information for personal financial gains and also to avoid large scale losses. It is a responsible act for one to avoid the inside trader.
