Question:
You are in your third year as an accountant with McCarver-Lynn Industries, a multidivisional company
involved in the manufacturing, marketing, and sales of surgical prosthetic devices. After the fiscal year-
end, you are working with the controller of the firm to prepare supplemental business segment
disclosures. Yesterday you presented her with the following summary information:
Upon returning to your office after lunch, you find the following memo:
Nice work. Let’s combine the data this way:
Some of our shareholders might react unfavorably to our recent focus on South African operations.
Required:
Do you perceive an ethical dilemma? What would be the likely impact of following the controller’s
suggestions?
Who would benefit? Who would be injured?
Answer:
The impact of following the controller's suggestions would be to obscure financial information by
aggregating the financial data of segment operations and investments. Aggregation of data makes
You are in your third year as an accountant with McCarver-Lynn Industries, a multidivisional company
involved in the manufacturing, marketing, and sales of surgical prosthetic devices. After the fiscal year-
end, you are working with the controller of the firm to prepare supplemental business segment
disclosures. Yesterday you presented her with the following summary information:
Upon returning to your office after lunch, you find the following memo:
Nice work. Let’s combine the data this way:
Some of our shareholders might react unfavorably to our recent focus on South African operations.
Required:
Do you perceive an ethical dilemma? What would be the likely impact of following the controller’s
suggestions?
Who would benefit? Who would be injured?
Answer:
The impact of following the controller's suggestions would be to obscure financial information by
aggregating the financial data of segment operations and investments. Aggregation of data makes
