Brian Wolf, controller for the Stiller division of International Amalgamated Incorporated, met with his new financial officer, Fred Gregory, to review the division’s financial condition and to consider plans for the future. Brian stressed that it had been a good year. Sales had reached $210 million, slightly in excess of the division’s goal of $200 million. Fred acknowledged this fine performance, but indicated that he was concerned about the future and that he desired to have more control over his reported sales and profits. He suggested several ways this could be achieved. He told Brian that when the division was having a good quarter he wanted to meet the assigned sales goals and then be very conservative in the accounting so as to have a good start on making the goals for the next period.
For example, if the division was near its quarterly target, a shipping moratorium could be declared for the last week or two of the quarter to shift some sales to the next quarter. These shipments could be sent to customers if absolutely necessary, but the paperwork could be delayed so that posting these shipments would not be recorded as sales until the next quarter. Fred told Brian that he should meet with Jim Ford of Sales to brainstorm for more ideas. He also told Brian that any discussions should be discreet. Even though none of this was illegal, he did not want to cause waves at the corporate headquarters.
Required
Should Brian have any ethical concerns after his meeting with Fred Gregory?
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