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Business Ethics Assignment: Ethical Behavior Of Fiona Willis & Alex Caldwell


Fiona Willis
Fiona Willis had a lot happening in her life right now, and she didn't really need an angry client on the phone. Fiona was newly married and newly accredited as a Chartered Accountant in the firm Caldwell, Burns and Burns Public Accountants. On top of that, last month her boss, Alex Caldwell, had placed her in charge a large account: Marshall Mining Equipment and Services (MME&S). She was happy to take over this important account, even though the company's founder, Hugo Marshall, was well known as an abrupt, rude and even bullying personality. On the other hand, MME&S was a good and timely payer of its accounts with Fiona's firm and was therefore an important revenue source. However, while Hugo Marshall rarely challenged his accounts from the firm, he always demanded results that were fair to him. There were always whispers in the firm that corners had been cut in the past to appease Hugo Marshall. Nothing was proven, so the rumors remained only rumors. Or at least they would until this phone call started.

So now Fiona found herself on the phone to an angry Hugo Marshall, and he was not happy with the results of a recent determination by the Australian Tax Office (ATO). According to Marshall, Fiona's flawed tax accounting (especially for fringe benefit tax) had resulted in an onerous tax liability imposed by the ATO. Why had this happened only when Fiona had taken over the account, Marshall demanded to know. He proceeded to tell her that her "overly conservative" approach was not suited to an entrepreneurial company and perhaps Marshall should look for a better accountant? Why did Willis report to the ATO that Marshall Employees routinely took Marshall fleet vehicles home and garaged them on their private premises? Her predecessors had always been happy to certify that this wasn't the case! And vehicle log books are not always reliable, are they?

So now Marshall thundered that the only thing that had changed for his business was that Fiona Willis was now doing his accounting and as a result his tax liability had risen sharply. He would look around for a better accounting firm, he informed her, since Caldwell, Burns & Burns were no longer looking after his best interests. In the meantime, he suggested, Fiona had better review her methods and the data she reported to the ATO, otherwise she should expect to have her income halved, and how would she like that? Then she would know how he, Hugo Marshall felt!

After the phone call, Fiona was devastated. No wonder, she realized, no-one else would work on this account. But she was not just upset, she was alarmed. She was confident of her professional judgment, but was there something else she was missing? How could her judgment about Marshall's tax liability be so different to everyone else's? She had no easy answer to that, but she had suspicions that were not helpful to her sense of trust of her colleagues.

However, Fiona had a more pressing problem than self-doubt or being harangued by an angry client. Fiona had a clear impression that she had been threatened by Marshall, and in a number of ways. First was a threat to have her sacked or replaced as the accountant in charge of the Marshall account. However, while she was certain that Marshall would complain to the partners of her firm, Fiona was confident that Caldwell would back her—albeit with a dressing down and maybe some further training. However, there was another threat, more disturbing to Fiona.

After Fiona had agreed to take over the Marshall account for Caldwell, Burns and Burns, she discovered that Marshall had been acquiring many local businesses and one of them was the metal fabrication company that her husband worked for. Does this mean that there is a conflict of interest for me, Fiona had wondered at the time. She thought that if she reported this to Alex Caldwell, she would be removed from the account and this account was her big break. So she said nothing. Besides, she thought, she had kept her maiden name and did not take her husband's name. There was no reason for Marshall or anyone else to make the connection or its significance. What could go wrong? Well, now she knew.

Hugo Marshall
Hugo Marshall was not afraid of a gamble. Ten years ago he had enacted a good strategy while the resources boom was happening and bought up infrastructure to increase the size of his company. Now, feeling that another boom was about to happen, he had taken over several companies and small businesses that allowed Marshall to offer a more complete service package to the resources industry. It was a worry that the resources boom had not yet really taken off, but Marshall was sure that it would happen soon. In the meantime he had to make sure that his accountants didn't do something silly that would get him into trouble with the tax office.

Marshall had always cultivated a mutually beneficial relationship with Alex Caldwell of Caldwell, Burns and Burns. Caldwell could always be relied upon to provide compliant accountants who would report results that were advantageous to Marshall. In return, Marshall would accept inflated invoices from the accounting firm and pay them promptly. Then, if he needed to berate and bully some accountant into revising an unfavorable tax assessment, he knew he could lean on Caldwell to make changes. As he put down the phone to end the call to Fiona Willis he smiled. He knew he could put pressure on Caldwell. Besides, this time he had real "dirt" on Willis that would not make Caldwell happy. Marshall smiled again; time to make that call.

Alex Caldwell
Alex Caldwell was a founder and senior partner of Caldwell, Burns and Burns Public Accountants. He was very proud of his firm, his staff and the fact that the firm was still earning good fees when other firms were struggling. Part of his success was the effort he had put into nurturing the relationship with Hugo Marshall.

There was a negative side to this approach, however. Caldwell’s firm had become unhealthily dependent upon Marshall. Worse, Marshall seemed to become more arrogant each year and more abrasive towards Caldwell’s staff. This year any accountant who had worked on Marshall’s account has resigned or simply refused to have anything to do with it. This forced him to put a young staff member in charge of the account, Fiona Willis, who had only recently achieved her Chartered Accountant qualification. Caldwell was very uneasy about this, but what else could he have done?

Caldwell was also uneasy about his own behavior when responding to Marshall's increasingly unreasonable demands. In the past Caldwell might have overruled his accountants on small matters, but now Marshall demanded that he falsify data on more important issues. He, Caldwell, had started down a path he had never intended to go down and now Marshall had him trapped. Caldwell was wondering with some dread when the next demand from Marshall would come when his phone rang. It was Marshall! Caldwell sighed and just as he was about to pick up the phone he saw Fiona Willis standing at his doorway looking very pale. This can't be good, Caldwell thought.

© Gerard L. Ilott CQUniversity 2020.

What you have to do

Assume that you are an expert in business ethics and Alex Caldwell has engaged you to write a report advising him of what he should do about the Hugo Marshall account. Assume that Fiona Willis has also told Caldwell about her potential conflict of interest involving her husband.

Part A: Applying theories of ethics (1,000 words max)
You must undertake independent research into the theories of egoism, utilitarianism and deontology. Now apply them as follows:

Analyze Fiona Willis' actions using the theory of egoism

Analyze Fiona Willis' actions using the theory of deontology

Analyze Alex Caldwell's actions using the theory of utilitarianism.

In each case, you must identify the key feature of the theory being used and show how they apply to the case. Conclude the section by explaining how a theoretical knowledge of ethics will help Caldwell deal with the Marshall problem.

Part B:
Using an ethical decision-making model (500 words max)

Take Caldwell through the AAA decision-making model step-by-step and arrive at the best ethical outcome for him.

Part C: Using APES 110 (1,000 words max)
Alex Caldwell is a Chartered Accountant and so are the accountants in the firm, and therefore APES 110 applies to all of them.

Advise Caldwell of the provisions of APES 110 that are relevant here, especially the fundamental principles, types of threats and relevant safeguards. Advice Caldwell of what he must do to be compliant with APES 110.

You must submit:
You must submit an individually written business ethics assignment report about ethical behavior and ethical decision-making


Executive summary
The purpose of the report is to analyze the ethical behavior of Fiona Willis and Alex Caldwell based on ethical theories and advice Caldwell for best ethical outcome using AAA decision making model. The action of Fiona Willis can be analyzed with the help of egoism ethical theory where Fiona is seen to take action depending on their own self-interest. Actions taken by Fiona as a part of her duty where it prefers to follow the learning she has achieved as a chartered accountant and implement her responsibility more than what Marshall demanded resembles deontology ethics. Based on utilitarianism theory it is seen that the action of Caldwell is unethical because he supported and fulfilled demand of Marshall and created unhappiness among his own employees. The AAA decision making model helps in reaching ethical decision through 7 different steps and this will help Caldwell to arrive at the best ethical outcome for him and the organization. The knowledge of APES 110 will enable Caldwell to solve the problem faced from his client Marshall.

Business ethics is one of the integral parts of the business because it implements ethical behavior in the organization and impact the motivation and behavior of others in workplace. According to Belás et al., (2020), business ethics refers to the moral rules, code of conduct and standards that guide in implementing truthful behavior in the organization in a specific time. this means it is the ethical decision making that the employees in business engages in and the impact it has on business performance. The purpose of the report is to analyze the ethical behavior of Fiona Willis and Alex Caldwell based on ethical theories and guiding Caldwell for best ethical outcome using AAA decision making model. Further, the report analyzes APES 110 and advice Caldwell on the actions to comply with APES 110.

Part A: Applying theories of ethics
Analysis of Fiona Willis Actions Using Egoism Ethics
Ethical egoism refers to the behavior in which the people out to pursue actions based on their own self-interest and holds no obligation in promoting the self-interest of others. A person with egoism ethics seeks to behave in a way that benefit them (Fang & Slavin, 2018). Such person works hard for their own benefit because they believe that by looking out for their own benefit, they will be able to generate general good for all. However, in this regard it is seen that this theory of ethics does not motivate a person to harm the interest and well-being of others when taking moral actions (Rachels, 2012). The action of Fiona Willis can be analyzed with the help of egoism ethical theory where Fiona is seen to take action depending on their own self-interest. Fiona’s action is based on individual ethical egoist where she is focused on “my” self interest. In the application of the case, it is seen that Fiona has taken the action of handling the important account of the company she joined with the expectation of benefiting in her career as a chartered accountant. She has newly accredited as a chartered accountant in the firm of Caldwell and taking over an important account of the company would mean that she will achieve significant growth in future in her career. Even though it was known that the founder of the important account that is Hugo Marshall was rude and had a bullying personality, yet Fiona decided to work for the account with the belief of benefit herself. This aligns with the theory of ethical egoism where people pursue their own self-interest and needs where Fiona takes the action of taking the responsibility of the account of Hugo Marshal to fulfill their professional needs.

Analysis of Fiona Willis Actions Using Deontology Ethics
Deontology ethical theory suggests that an action is good or bad based on the set of rules and the action that abide by the rules are ethical in nature. This means that obeying the rules and right thing is what ethical theory of deontology states. Moreover, Hooker & Kim (2018) states that according to deontological ethics an action is morally correct when it is taken based on certain characteristic. This means that an act that is not morally good can lead to something good in future and the intention behind the action is seen to determine the ethical behavior rather than the consequences. This theory can also be used to analyze the action taken by Fiona in the organization that she has joined. She has calculated the account of Marshal in a way that shows that the company has more tax liabilities imposed by ATO. Moreover, she also pointed out that the company allows the employees to take the fleet vehicles home and garage in their private premises. These actions were taken by Fiona as a part of her duty where it prefers to follow the learning she has achieved as a chartered accountant and implement her responsibility more than what Marshall demanded. This means that Fiona’s act was based on doing something good even though it can cause negative consequences for Caldwell because she did not abide by the relation that Caldwell company had with their client MMR&S. Caldwell will face the anger of Marshal because his tax liability has increase drastically after the accounting of Fiona and Caldwell might lose their client. However, the action of Fiona is ethical according to Deontological theory because the morality of her action is based on the fact that she has done the calculation according to the accounting rules instead of considering the consequences.

Analysis of Alex Caldwell Actions Using Utilitarianism Ethics
The third type of ethical theory is Utilitarianism ethics that states that right and wrong of an action is determines from the outcome of that action. This is because it is a form of consequentialism where consequences are focused more than the intention of the action (Broad, 2014). According to de Lazari-Radek & Singer (2017), utilitarianism is a theory of morality that focus on actions that foster happiness rather than that cause unhappiness and harm. This means that an action is right and ethical if it encourages morality and wrong if it produces stress. Based on this theory it is seen that the action of Caldwell is unethical because he supported and fulfilled demand of Marshall and created unhappiness among his own employees. Many of his staff has resigned after working on Marshall’s account and this shows the happiness created from the action of Caldwell by supporting unreasonable demands of Marshall.

Theoretical Knowledge of Ethics is Helpful to Caldwell
Business ethics helps in suggesting the moral rules and behaviors that is current and lead to positive work outcome. The knowledge of ethical theories like the ones suggested above will be highly helpful for Caldwell to deal with Marshall’s problem because through the ethical theories Caldwell will be able to determine the way he is being unethical in his work and responsibility and judge whether the action of Fiona was ethical or unethical. Moreover, with the help of ethical theories Caldwell will be able to understand whether the behavior of Marshal is ethical or unethical and take decision of helping him with his accounts and falsify data in future. This means that Caldwell will be able to analyze the ethical and morality of his decision based on different ethical theories and take decision that is morally correct. Further, Belás et al., (2020) has stated that the knowledge of ethical theories helps in judging the characteristic of a moral person and differentiate between right and wrong. Moreover, business ethics helps in highlighting unethical incidence in corporates conducted by owners and managers. Based on this fact it can be stated that knowledge of theory will help Caldwell to learn about unethical incidences that is being created due to Marshall’s account and the way such activity needs to be avoided to protect the reputation of Caldwell’s company.

Part B: Decision Making Model
Ethical decision making refers to the information action taken by a person depending on their own senses of what is right or wrong (Endenich & Trapp, 2018). The AAA decision making model helps in reaching ethical decision through 7 different steps and this will help Caldwell to arrive at the best ethical outcome for him and the organization.

Step 1- What are the facts of the case?
The facts in the case are that Caldwell company support Marshall in his accounting needs and falsified data for making it advantageous for him. Fiona’s accounting caused high tax liability to Marshall. Marshall is unhappy and wants Caldwell to solve his problem and revise the unfavorable tax assessment. Caldwell support Marshall in all kinds of accounting needs and there is a negative side to this approach.

Step 2- What are the ethical issues in the case?
The ethical issues in the given case study are that Caldwell support Marshall in his accounting need through wrongful way to reduce his tax liabilities and make a favorable tax assessment. Secondly, Caldwell does not support his employees when the client is wrong and prefer losing his staff to fulfill the wrong demands of Marshall. Lastly, Caldwell forced his young staff Fiona to take over the account of Marshall knowing about his behaviors and reactions of previous employees.

Step 3- What are the norms, principles and values related to the case?
The accounting principles and values that are related to the case are integrity, objectivity and professional behavior. This is because in the given case it is seen that Caldwell has failed to meet these three principles such as being true and honest to all business relationships, as he has supported his client Marshal and formed accounting data that is in his favor rather than true. Moreover, he has also been biased while making accounting judgement of Marshall and failed to comply with relevant laws and regulations.

Step 4- what are alternative actions?
The alternative actions that Caldwell can take are:

  • Action 1- To increase his knowledge about relevant accounting laws and comply by such laws.
  • Action 2- To make unbiased business or accounting judgement of Marshall’s accounting stating his true tax liability.
  • Action 3- To be straightforward to his client that is Marshall that his company is true and offer best accounting services as expected by the accounting profession.

Step 5- What is the best course of action?
The best course of action that is consistent with all relevant norms, principles and values is to increase knowledge on relevant accounting laws and comply with such law. This action will not only help Caldwell to explain the action taken by Fiona based on legal requirement, however, it will also help him to be consistent with the principles of professional behavior, integrity and objectivity.

Step 6- What are the consequences of each suggestion action?
action 1- will help Caldwell’s company to be trustworthy, transparent and might not lose his client.

action 2- to fulfill the expectation of his accounting profession and might lose his client.

action 2- to fulfill the expectation of his accounting profession and might lose his client.

Step 7- What is the final decision?
The best and final decision is to learn about accounting laws and comply by it because it will also help Caldwell to hold back his client Marshall by giving reasonable reason for not conducting biased action and reduce his tax liability.

Part C: Using APES 110
APES 110 helps in setting out general principles of accounting and help the accountants to recognize the threats and dangers that confronts their ethical conduct and ethical decisions. APES 110 applies to all the chartered accountant to conduct their accounting profession efficiently. APES provisions can be recognized in three different division that is relevant principles, threats and relevant safeguards. APES 110 firstly put forward the five accounting principles such as integrity, objectivity, professional competence, confidentiality and professional behavior. These principles help the accountant and their firm to be trustworthy, transparent, competent and provide best quality accounting service (Fasea, 2021). Caldwell can comply by the provision of accounting principles to solve the issue he is facing from his client Marshall and the action he should take regarding Marshall’s account.

Caldwell should work on all three provision of APES 110 to comply by the accounting needs such as principles, threats and safeguards. To comply with the principles of APES 110, Caldwell should be straightforward to his client Marshall whether the accounting result of Fiona is true and correct and deal fairly. Moreover, Caldwell should not guide his decision of dealing with Marshall based on his emotion or relationship bias and use his accounting knowledge and skills to communicate with Marshall.

In addition to this, APES 110 also puts forward threats and relevant safeguard that Caldwell should be aware of while implementing his accounting profession. The kind of threats that an accountant can face in their profession and should avoid are self-interest threat, self-review threat, advocacy threat, familiarity threat and intimidation threat. This means that an accounting professional should be careful of being influenced by their own self-interest and cannot review their own work (Accounting Professional and Ethical Standards Board, 2013). Likewise, there is a threat that an accountant should avoid of being a salesperson at the expense of their own judgement. Moreover, Caldwell should avoid getting affected by long term relationship with Marshall and take decisions on the interest of the client rather than on public interest. Lastly, the accountant might face the threat of being pressurized by the client to act on their interest rather than in public interest and Caldwell should avoid being affected by this threat.

In relation to the stated threats Caldwell needs to be aware and reduce the threats of self-interest, self-review, advocacy, familiarity and intimidation. Firstly, Caldwell should be careful of taking decision on Marshall’s account based on fair valuation rather than considering the self-interest of holding on the client. Secondly, Caldwell should evaluate the work of Fiona himself and by other employees rather than allowing help to review her own work. Further, Caldwell should avoid being a salesperson rather than professional accountant and be true to the accounting numbers. Lastly, Caldwell should not support Marshall in his unfavorable just to protect their long-term relationship and avoid feeling pressurized by the client. This will help him protect himself and the firm from familiarity and intimidation threat.

Lastly, the APES 110 also states various safeguards that helps the accountant to mitigate the threats they are facing. The steps stated in the safeguards helps in reducing the threats and are present at legislation and profession level, work environment level and at personal level.

In relation to safeguards it is advised to Caldwell that he should implement safeguards at legislation level and personal level. At the legislation level it is advised that Caldwell should take help from external reviews of the work produced by his employees such as Fiona so that it is audited with the help of legislation and executed through professional monitoring procedures. At the personal level Caldwell is advised to learn and have better understanding of the ethics so that he can apply it effectively in his own firm and be informed about new accounting rules. This will help him be protected from the threats and comply by the needed principles effectively over time. for the purpose, Caldwell is also advised to implement the AAA decision making model using seven steps as stated above so that he is able to deal with the issue of Marshall.

Through making use of each of the provisions it is seen that Caldwell will be able to comply by APES 110 effectively and be able to answer Marshall’s issue as well as be able to judge the work of Fiona.

In conclusion it can be stated that ethical issues arise in an accounting firm and it is important for the firm to deal with the issue by making use of various ethical theories, decision making model and complying with the provisions of APES 110. Caldwell is advised to learn about the theories of business ethics to manage the problem from Marshall and show better professional attitude expected from an accounting professional.

Accounting Professional and Ethical Standards Board (APESB). (2021). APES 110 CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS. Retrieved 7 January 2021, from,other%20two%20Australian%20accounting%20bodies.

Fasea. (2021). Code of Ethics. Retrieved 7 January 2021, from

Belás, J., Khan, K. A., Maroušek, J., & Rozsa, Z. (2020). Perceptions of the importance of business ethics in SMEs: A comparative study of Czech and Slovak entrepreneurs. Ethics & Bioethics, 10(1-2), 96-106.

Broad, C. D. (2014). Five types of ethical theory. Routledge.

de Lazari-Radek, K., & Singer, P. (2017). Utilitarianism: a very short introduction. Oxford University Press.

Endenich, C., & Trapp, R. (2018). Signaling effects of scholarly profiles–The editorial teams of North American accounting association journals. Critical Perspectives on Accounting, 51, 4-23.

Fang, J., & Slavin, N. (2018). Ethics–Comparing Ethical Egoism with Confucius’s Golden Rule. Journal of Business and Economic Studies, 22(1), 17-31.

Hooker, J. N., & Kim, T. W. N. (2018, December). Toward non-intuition-based machine and artificial intelligence ethics: A deontological approach based on modal logic. In Proceedings of the 2018 AAAI/ACM Conference on AI, Ethics, and Society (pp. 130-136).

Rachels, J. (2012). Ethical egoism. Ethical theory: an anthology, 14, 193.


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