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The Midnight Journal Entry Report
The Midnight Journal Entry Report
BUSINESS ETHICS
Title:
The actor is Rechard Okumoto, who is the Chief Financial Officer (CFO) of Electro
Scientific Industries, Inc. (ESI). He intently studied a set of hard copy accounting
document call adjusting journal entries.
Yes, there are several ethical issues arise from the accounting documents studied by
Richard Okumoto.
Bullying employee
The second issue is about bullying the employee. The CEO had bullying the employee by
threatened the employee in order to cover up his dirt work. For example, the CEO has
forcing Okumoto to ignore the problem and after that Okumoto had receive the
anonymous massage.
Besides that, the other employee that involve in the problem also could not be spoke up
as they were scared. They actually know something was wrong and they want to try
saying something but something held them back.
The CFO, Richard Okumoto should whistleblowing the issue arise to the external auditor,
Board of Director of ESI with the evidence of the overstated net income and the
elimination retirement allowance in a set of revised work rules (terms of employment) for
the ESI Japanese employees. Besides that, Okumoto and Mike Tetsui, the Japanese
manager to disclose the retirement benefit that had been terminated to the employee.
Besides that, Okumoto also might face difficulty in searching a new job if he being fired
as the other company might be afraid or avoid accepting him to become their employee
as he made the disclosure.
Stakeholder
The action that Okumoto do either to disclosed the issue or not would be affecting the
internal and external stakeholder. The internal stakeholder include shareholder and
employee would be affected. If Okumoto did not disclose the problem, it will harm the
employee as they did not receive the benefit allowance. Besides that, the shareholder
would also being affected as they could not rise up their wealth as the company did not
perform well (loss).
In addition, the external stakeholder especially the public (i.e. potential investor) will also
be affected. Because of the wrong profit figure in the financial report, it would attract the
potential investor to invest in the company. If the public invest in the company, they
would be harm as the company actually did not perform well and they getting loss figure
in the financial statement. So, if Okumoto disclose the problem, he can avoid the public
from being harm from investing in the company.
Mentors influence
Okumoto has three exceptional mentors that influence him to be an ethical person. His
mentor name were Woody Spedden (the CEO of Credence Systems), Jim Hefferman (his
boss at Fairchild and later at Measurex), and Don Waite (the CFO at Measurex who later
took over that position at Seagate Technologies). These mentors had rising up the
integrity value. Okumoto had learned the ethical value during the technical training from
them and he got strong ethical grounding. Besides, they always tell Okumoto to ask
himself- what are your obligations to others? This question was always being question by
Okumoto, himself in performing his work. The ethical value that he gets from his
mentors made him to be an ethical person and influence him in his action.
The person who should Okumoto contact are the audit committee, Board of Director and
Labour and employment attorney.