ACCT 436 ETHICS CASE STUDY

ACCT 436 ETHICS CASE STUDY

Read the attached case and Answer the following Questions:

    Identify and briefly discuss the key issue(s) in the case.
    What was the ethical dilemma faced by Beth Sullivan?
    Do you think Beth acted ethically? Why or why not?
    Are there any other alternative courses of action possible for Beth?

Your answers to the questions should be specific, well-reasoned and supported by appropriate evidence. Do not just quote from the case.

Your response (one to two pages long, single spaced, Arial 10 or Times New Roman 12 font)


Roger McDaniels sat in front of his computer pondering his immediate future. He had just finished an impromptu meeting with Beth Sullivan from the internal audit department and his confidence was shaken. Both Roger and Beth left the meeting wondering if their recent decisions were for the best.
Roger's accounting career began approximately ten years ago when he became a CPA. Over the last decade, Roger had been successfully employed in a variety of accounting positions. It therefore came as no surprise to Roger when three months ago, he was contacted by an executive recruiter and offered the CFO position at Solodor Pharmaceuticals (SP). SP's mission was to conduct tests on Celenza, a new drug that had been developed to fight acute lymphoblastic leukemia. If successful, Celenza had the potential to increase the average life expectancy of affected patients by up to six years. Celenza offered terminal patients the most hope of any drug in over a decade. Although not stated publically, it was known in the industry that other pharmaceutical companies did not want to incur the significant costs associated with developing a similar drug because sales of a new drug would merely cannibalize sales from their current, but less effective medications.
Upon accepting the employment offer from SP, Roger felt very exhilarated. If SP's mission was successful, not only would Roger be handsomely rewarded (as his compensation package provided him with numerous stock options, which in themselves would likely make Roger a millionaire), but Roger would also play a part in extending the lives of numerous terminally ill patients. Given the history of death in his family from various forms of cancer, more specifically the death of his father from leukemia when he was only a child, Roger was all too aware of the pain and mental anguish associated with terminal illnesses.
Upon starting his new position, Roger was not surprised to learn that, similar to other new pharmaceutical companies, SP was currently experiencing severe cash flow problems. Thus, the immediate priority for Roger was to procure a round of additional equity financing. If Celenza was shown to be successful, it had the potential to be a cash cow. However, in its current state, SP had no expectations of any Celenza sales occurring for at least two more years because extensive testing was needed before the FDA's Center for Drug Evaluation and Research would even consider approving the drug. Without obtaining a minimum of $5,500,000, SP would run out of money and be forced to liquidate within the next four months. This would not only leave Roger unemployed but would make his stock options worthless. It would also put Celenza's future in jeopardy.