Question

In: Accounting

For the past year, you have been working as a secretary/ processor for a local construction...

For the past year, you have been working as a secretary/ processor for a local construction company, XYZ Homes, which specializes in the building of low-cost, limited-option homes. You left a comfortable, good- paying job to work for XYZ because it was family- owned and operated by longtime friends.

Soon after you began working for XYZ, you noticed questionable behavior on the part of Mr. and Mrs. XYZ’s two sons, who are company salesmen. In fact, you are positive that they are falsifying documents to increase their commissions and to trick local banks into approving mortgages to customers who don’t meet credit standards.

You are trying to decide how to handle the situation when one of the sons approaches you and asks you to produce and sign a memo to a bank, falsely stating that a certain potential home buyer is credit worthy. You refuse to do so and, after much consideration, approach Mr. XYZ about the situation. To your surprise, he simply brushes off your comments as unimportant and laughingly states that “boys will be boys.”

What would you do in this situation? Is the fact that you correctly refused to produce and sign a false memo enough, or are you obligated to report these crimes to the banks and proper authorities? Discuss the options, responsibilities, and implications you are facing. ANSWER IN THREE PARAGRAPHS OR SO.

Solutions

Expert Solution

Under the situation where we are asked to produce and sign a false memo and falsely creditify a home buyer's worth, we clearly refuse, even though the owner's son asked us to do so. This is because if we would not refuse at the first time, it will mount to a huge crime towards the banks and the authorities. To increase the commission, we have to falsify the documents, which is a big crime in law.

It is not our, essentially, obligation to report the crimes to the banks and authorities because we are working as a employee in the company and we should not indulge in any kind of crime in the company, so it is our obligation to stop the happening of crime in the company.

The options available with us towards the accepting the criminal work are : (1) to refuse to work so (2) to accept the job (3) to report the crime happening in the company.

Our responsibilities towards the situation in which we are working is that (a) should not let the crime happen in the company (b) let ourselves away from crime (c) ask our company's employee or owner's sons not to indulge in criminal activities. We have to fill our responsibilities towards the company by fulfilling our job responsibilities without doing the falsify activities.

The implications of this situation is that either we get indulge in the criminal activities alongwith the owner's sons or we able to correct the actions of the owner's sons, thus able to save our company getting an illegal revenue and incomes.


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