Discussion
Andrea Tabares was just hired as the assistant treasurer of Northshore Stores, a specialty chain store company that has nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Andrea will manage. Her primary responsibility is to maintain the company’s high credit rating by paying all bills when due and to take advantage of all cash discounts.
William Parks, the former assistant treasurer, who has been promoted to treasurer, is training Andrea in her new duties. He instructs Andrea that she is to continue the practice of preparing all checks “net of discount” and dating the checks the last day of the discount period.
“But,” William continues, “we always hold the checks at least four days beyond the discount period before mailing them. That way we get another four days of interest on our money. Most of our creditors need our business and don’t complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We’ve only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!”
- What are the ethical considerations in this case?
- What stakeholders are harmed or benefited?
- Should Andrea continue the practice started by William? Does she have any choice?
