Running Head: BENCHMARK – BUDGETING AND PLANNING 1

Benchmark - Budgeting and planning

Student’s Name

Institutional Affiliation
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Benchmark - Budgeting and planning

a) Why would Green care about the level of budgeted net income?

Green would care about the level of budgeted net income possibly because in the end, it is the

net income that determined the measure of profitability in the company. He understands that

budgeting is an important aspect in tracking the company’s expenses, and controlling the

spending and thus, saving more money and resources. Green also understands that in order to

make better financial decisions, prepare for emergent matters and also to ensure that the

company stays focused on its long-term financial goals, it is necessary to budget appropriately.

Green is the core director in the Southeast region. Therefore, he has to pay sufficient attention to

the region’s budgeting to ensure that it attains its targets in the forthcoming years. Among the

aspects that Green has to consider are sales revenue and the cost of expenses (Koch & Hooks,

2020). Sales revenue and expenses are essential components in the determination of profit as

their difference determines the profitability of the company. Therefore, Green has to make sure

that the company continually makes profit.

Therefore, Green’s main intention is to ensure that at no point will the expenses will be more

than the sales revenue as this will lead to losses. Not only will higher profits lead to the

profitability of the company, but also will it lead will it motivate future investors. Consequently,

Green also purposes to open new departmental stores and shoot the pricing to 4%. Despite the

fact that he lives in a low-cost region, he does not seem concerned with the low purchasing

power of the people in the region (The Association of Accountants and Financial Professionals in

Business, 2014). Green seems to focus more on his ambitions and dreams. Therefore, Green

cares more about the level of budgeted income.

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b) What do you think Mayfield's reaction would be if she learned of Green's actions?

I think that Mayfield will be displeased with Green’s action. This is because his action appears as

if they are manipulative and sneaky to the rules of the company. Green is only focused on

achieving his dreams and ambitions without considering the welfare of the company’s clients. I it

is discovered that Green asked Duvall to manipulate the real net income so that he can reduce the

expenses of the new stores he purposes to open; he will probably be fired.

c) What does Duvall have to gain from his actions? Does he have anything to lose?

Duvall want to gain job security. He understands that Green has been retailing against employees

who do not comply to his requests. Additionally, he wants to secure an job vacancy for his wife

when the new franchises are eventually launched. Duvall has something to lose, his reputation

with the company and other companies. He however does not seem to understand it. If Mayfield

discovers that Duvall collaborated with Green in such unethical practices, Mayfield will lose her

trust in him. She might also not recommend him to other company’s requiring the services of a

certified management accountant. Thus, Duvall’s reputation is at stake.

d) Refer to the IMA's Statement of Ethical Professional Practice in Exhibit 1-8. What

responsibilities does Duvall have in this situation? Did he violate the Statement? If so,

how?

Duvall violated the IMA statement of Ethical Professional Practices. His role requires him to be

credible and disclose all instances of unethicality in the company (The Association of

Accountants and Financial Professionals in Business, 2014). He however choses to remain

intimidated by the fear that Green will retaliate against him if he does not comply to his

demands. Duvall is also guided by personal interests in that he wants to secure an employment
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chance for his wife. Duvall should be responsible in his work, but in this case, he is manipulated

and is also guided by his interests. Therefore, he violates the IMA statement of Ethical

Professional Practices.
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References

Heath, J. (2020). Morality, competition, and the firm : the market failures approach to business

ethics. New York: Oxford University Press.

Koch, C. G., & Hooks, B. (2020). Believe in people : bottom-up solutions for a top-down world.

New York, New York: St Martin’s Press.

Mees, B. (2021). Rise Of Business Ethics. S.L.: Routledge.

The Association of Accountants and Financial Professionals in Business. (2014). Statement of

Ethical Professional Practice The Association of Accountants and Financial

Professionals in Business ima. Retrieved from

https://www.imanet.org/-/media/b6fbeeb74d964e6c9fe654c48456e61f.ashx?la=en