ACC 696 Milestone two (CH)

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Southern New Hampshire University *

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696

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Apr 3, 2024

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Milestone two School of Accounting, Southern New Hampshire University ACC-696: Situational Ethics Accounting January 1, 2023

2 Theoretical Models: Violated The four theoretical models of ethics are Utilitarianism, Deontology, Justice (Rights) and Virtues. Utilitarianism is concerned with consequences…. the utilitarian seeks to make decisions which bring about the greatest good for the greatest number of people (Mintz, S.M & Miller, 2020) Deontology falls within the domain of moral theories that guide and assess our choices of what we ought to do, in contract to those that guide and what that kind of person you are and should be (Alexander & Moore, 2021). Justice (aka Rights) act respects you right and treats you fairly. It gives each person he or she what they deserve (Mintz, & Miller, 2020). Lastly is Virtue applying to the decision maker and to the act under consideration. It focusses on both the person engaging in the act and the act itself. General Electric (GE) violated the Justice (Rights) Theoretical model. As we have defined above, Justice gives you respect to your rights and treats you fairly. It gives each person he or she what they deserve. With GE failing to disclosing information about the nature of the profit growth in the power business of $2.5 millions to its investors (SEC Press release, 2020). This was a violation of the investors rights to know about the profits and giving the investors the opportunity to make a determination if they wanted to invest into GE or not. GE also misled the investors without explain that $1.4 billion in 2016 and $1.1. billion in the first three quarter of 2017 stemmed from reduction in cost estimates. GE also with its insurance business, long term care policies were badly underpriced and the policy holders have exceeded GE original projections for years and failed to disclose it rising claim cost and the resulting in potential for material insurance losses (SEC press release, 2020). Theoretical Models: Better Decisions

3 Utilitarianism would have made the decision that even if it is bad would bring the greatest food for the greatest number of people. Using this theoretical method with GE would have provided the information about the revenue recognition and disclosure to the investors to let everyone know that these changes are being done. GE wanted to appear the business had additional cash flow, by doing this they boosted public reported cash flow measuring by more than $1.4 millions and failed to disclose to investors it adoption and reliance on deferred monetization which increased present cash flow at the expense of future years (SEC press release, 2020). With the Utilitarianism method they would have provided the information about the adoption and the re classification of the estimated cost for the insurance policy business to show the substantial losses. Yes, this would have hurt their bottom line but it may could have saved them for the SEC filing and owing $200 million payment and the substantial decrease in their stock prices. In contracts the Enlightened Egoism you would make decisions to purse self-interest to maximize general prosperity. This choice is that the CEO Jeff Immelt would want to appear that he is doing a great job turning GE around after years of decline. Mr. Immelt was CEO of GE for 19 years. He wiped out $150 billion in market value and got GE dropped from the Dow Jones Industrial Average. He stated that he wishes he would have taken a more holistic look at the company (JadeScipioni. 2021). I believe he made decision because of his self-interest since that the stock price had plunged 30% since he took over the position and wanted to be remember that he was better than his predecessor Jack Walsh. Influences and Standards: Regulatory Activities The regulatory activities that govern General Electrics (GE) is the Security Exchange Commission (SEC). The SEC delegates this responsibility to Financial Accounting and Standard

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