Free Custom «Reduction in the Sales Level» Essay Paper

In spite of the reduction in the sales level in the year 2004, Mr. Dennis still orders for an increase in production for the year 2005. This is because he forecasts and sees that the inflation rate that is causing the decline of economies in foreign countries will eventually come to an end. As a result, he will be able to achieve his goals of acquiring and selling his shares at a higher price thus, in the long run earns himself profit.

Mr. Dennis behavior violates the standard of ethics conduct code on the competency of management accountants. This is because he failed in his responsibility to maintain appropriate professional competence as accorded in integrity management accountant’s code of responsibilities. He shows conflict of interest between, his personal and professional interests by engaging himself in a decision-making that would prejudice his ability to carry out duties ethically. In addition, the decision based on his share acquirement prejudices his position as an intelligent manager. Through his decision, he puts the company’s performance at stake.

Criminal and ethical misconduct arises when an individual breaches the law, regulations and policies that govern their employment in the office they occupy. These criminal and ethical misconduct cases have resulted in compliance standards, legal sanctions, governance practices, and cultural transformations. There are features in the above case that illustrate Mr. Dennis criminal and ethical misconduct.

Primarily, is Mr. Dennis concern that price of his stock options could fall due to the decline in sales of the company? He therefore, acts against the code of ethics as he acts in his favor at acquire more profits as a shareholder rather than taking a decision that will favor the business. In addition, his puzzling idea of increasing production at a point when the company is facing a critical position is one way in which he does not act in his professional position. As a result, he puts the company at a risk of producing goods that might not be sold out to the market.