CHAPTER 19
Capital Investment
COLLABORATIVE LEARNING EXERCISE SOLUTION
1. Peter’s suggestion is unethical. The guidelines for capital projects are in place to help en-
sure sound decisions. Falsifying data to bypass the guidelines shows a lack of integrity.
2. Laura should not comply with Peter’s request; she should attempt to convince Peter that a
different approach is better. For example, she might advise him to talk with those who
prepared the report. Perhaps he could convince them that they overlooked some signifi-
cant factors in favor of the project. At the very least, this approach would enable Peter to
again review the findings, with the hope that either he or the consultants will alter their
views.
3. If Laura complies with Peter’s request, some of the standards that would be violated are
as follows:
I-3: Provide decision support information and recommendations that are accurate,
clear, concise, and timely.
III-2. Refrain from engaging in or supporting any conduct that would prejudice
carrying out duties ethically.
III-3: Abstain from engaging in or supporting any activity that might discredit the
profession.
IV-1. Communicate information fairly and objectively.
IV-2. Disclose fully all relevant information that could reasonably be expected
to influence an intended user’s understanding of the reports, comments, and rec-
ommendations presented.
4. This response increases the difficulty of the situation because it tends to legitimatize Pe-
ter’s behavior. Nonetheless, a superior’s willingness to condone the behavior does not
make it right. Nor does it change the fact that if Laura complies with the request, she will
be violating several ethical standards. Laura should continue to pursue the matter with
higher-level managers, assuming she is convinced that Peter will insist that the report be
falsified.