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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Ethics and professional conduct in business using nonmanufacturing standards
Christy Eisenbeis is a cost analyst with Nations Insurance Company. Nations Insurance is applying standards to its claims payment operation. Claims payment is a repetitive operation that could be evaluated with standards. Christy used time and motion studies to identify an ideal standard of 24 claims processed per hour. The Claims Processing Department manager, Everett Boyle, has rejected this standard and has argued that the standard should be 18 claims processed per hour. Everett and Christy were unable to agree, so they decided
to discuss this matter openly at a joint meeting with the vice president of operations, who would arbitrate a final decision. Prior to the meeting. Christy wrote the following memo to the VR
To: Megan Wilkins, Vice President of Operations
From: Christy Eisenbeis
Re: Standards in the Claims Processing Deportment
As you know, Everett and I are scheduled to meet with you to discuss our disagreement with respect to the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the ideal standard is 24 claims processed per hour. Everett argues that 18 claims processed per hour would be more appropriate. I believe he is trying to "pod" the budget with some slack. I'm not sure what he is trying to get away with, but I believe a tight standard will drive efficiency up in his area. I hope you will agree when we meet with you next week.
Discuss the ethical and professional issues in this situation.

To determine

Concept Introduction:

Morals are judgments, standards, and rules of good conduct in the society. They guide people toward permissible behavior with regard to basic values. Business ethics are business policies and practices which are made to conduct a business in an ethical and moral way. Ethics can be found it laws but some are developed with the situations and moral and acceptable social behaviors.

To Indicate:

If the action of the director is ethical or unethical

Explanation

The director wants to defer the expense to avoid the revision of standards at lower value. The standards are prepared for the evaluation of actual performance; any malpracti...

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Chapter 13 Solutions

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