Group 5 Final Group Activity Accnt

Decide the case by following the steps in moral decision making.

You are an Accountant working in the insolvency department of a medium-sized accountancy firm. You
are currently working on the sale of a piece of land that belonged to a company that has gone into
liquidation. The deadline for the sale of the land has been set at 12.00 pm on that day.

At 11.30 am you receive a call from a prospective buyer who wishes to remain anonymous. The caller
informs you that he is very interested in the land but does not want to have to pay over the odds to
ensure that he gets it. Therefore, he makes the following proposition to you:

He is willing to pay a premium of 15% above the highest bid received by 11.55 am provided he is
informed beforehand of the highest bid received.

The caller advises that this way everyone wins as he explains succinctly as follows:

“Your firm and ultimately the bank win because a higher fee is received for the asset in question, I win
because I do not have to make an unnecessarily high blind bid and you will also be rewarded by me for
your hard work.”

He adds that this illustrates that “transparency is the best policy”.

The caller reiterates that this is the most effective outcome for all parties concerned and that your boss
will be delighted that a last-minute offer has at least ensured a reasonable return for the asset in
question. The bank will also be very pleased as this sale will increase its level of return on the debt
outstanding.

You advise the caller that this is not the way that you or your firm do business and that if he wants to
attempt to purchase the land then he should follow the required procedure of the sale and email his bid
prior to the midday deadline.

The caller advises that he respects your integrity but advises that this type of activity is commonplace in
the industry and insinuates without naming names that other more senior personnel within your firm
have taken advantage of his very generous financial terms in the past. Furthermore, the bank is unlikely
to be happy if it was to find out that your firm had rejected a higher bid than what was eventually
obtained for the asset. This could have a serious impact on any future work being awarded to your firm
and your own career would suffer as a result.

The caller then advises that he will phone you back in five minutes for a decision as to whether you will
accept his proposition. You do not get a chance to reply, as the caller then hangs up.

What should you do?