Prior year costs, quality of information Software Solutions is a family–owned business that has been in operation for more than 15 years. The board of directors is comprised of mainly family members, plus a few professionals such as an accountant and lawyer. Regina is a staff accountant who has been working on the budget for the last several weeks. The Director of Finance needs to present the budget at the next
board meeting and wants a preliminary copy in two days. Regina is certain that she will not be able to finish the budget within two days. Several department heads have not turned in their preliminary figures, and two departments have budgeted large increases in fixed costs for replacing computer equipment.
Regina knows she should have alerted the Director of Finance about these budgeted increases, but she has not had time. One of her coworkers knows that Regina is behind and suggests that she use last year’s budgets for those departments that have not provided information and also for the departments that increased their budgets by large amounts. The coworker says that the budget can be straightened out later because the board does not pay attention to the details.
REQUIRED:
• A. Is this an ethical dilemma for Regina? Why or why not?
• B. Why might it be important for the board of directors to have as much updated information as possible about the budget?
• C. What should Regina do, given that not enough time is available to gather high–quality information? Explain your thinking.
