Milton Manufacturing Company is a closely-held company has been in business since 1999 when its President Irv Milton first opened the business with its primary operations in Long Island City, New York and factory branches and warehouses in surrounding areas. The business had increased revenue over its first ten years of business from $500,000 in its first year to $5 million in 2008.
However, in 2009 revenues declined to $4.5 million along with net cash flows from all activities declining in 2009 as well. Overall capital expenditures for the company have been continually increasing by 26% each year. Milton had planned on borrowing $20 million in the fourth quarter of 2010 from …show more content…
4. List the relevant core values involved in the situation.
The relevant core values involved in this situation are respect, fairness, and trustworthiness. Markowicz should show respect to the company officers and management by not just doing as he pleases, but by first at least explaining his reasoning for why he thinks that his expenditures are needed currently.
5. Identify the operational issues.
The machine break-downs increasing more are causing great operational inefficient and therefore creating an increase in delays of meeting customers’ shipment demands.
6. Identify the accounting issues.
The ease of which Markowicz was able to make it through internal controls, and convince the plant accountant to record a transaction that did not accurately show what it really represented happening and therefore reported capital assets, machinery, as an operating expense.
7. List all the possible alternatives of what you can or cannot do.
Option 1 is to just pretend that management never found out what happened and fix the accounting entry and just pretend like it never happened.
Option 2 is not to take any disciplinary action on anyone, just simply coaching and speaking with Markowicz and Sugofsky, who both failed on their duties and coach them to handle the situation differently next time.
Option 3 is to publically punish Markowicz by allowing public interviews and exposing the details of what