Ethics: Miniature Magic Ltd. manufactures dollhouses in a continuous process. Various customising features and furnishings are added at the end of the process to create the various models that are sold. The basic design and floor plans of all the houses are identical, however.
During the most recent month, the lumber used in trimming the houses was inadvertently recorded as direct materials. At month end, when the error was discovered, Susan Long, the accountant, was told by the accounting manager, Tina Barr, not to bother with correcting the error, because the dollar amount of the error was not 'worth it.' Susan believes that the dollar amount is not as important as the quality of the reports. She wonders whether she would be committing an unethical act if she were to make the changes anyway, despite her superior's telling her not to.
Required:
1. Who are the stakeholders in this situation?
2. Was it unethical for the company to ask that the error not be corrected? Explain briefly.
3. Would it be unethical for Susan to correct the error? Explain briefly.

Question

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The Answer of Ethics: Miniature Magic Ltd. manufactures dollhouses in a continuous process. Various customising features and furnishings are added at the end of the process to create the various models that are sold. The basic design and floor plans of all the houses are identical, however.
During the most recent month, the lumber used in trimming the houses was inadvertently recorded as direct materials. At month end, when the error was discovered, Susan Long, the accountant, was told by the accounting manager, Tina Barr, not to bother with correcting the error, because the dollar amount of the error was not 'worth it.' Susan believes that the dollar amount is not as important as the quality of the reports. She wonders whether she would be committing an unethical act if she were to make the changes anyway, despite her superior's telling her not to.
Required:
1. Who are the stakeholders in this situation?
2. Was it unethical for the company to ask that the error not be corrected? Explain briefly.
3. Would it be unethical for Susan to correct the error? Explain briefly.