Present and justify your own view as to how Robert Wallaceshould resolve the dilemma in which he finds himself. (750 WORDESSAY QUESTION)
Robert Wallace graduated from Indiana University in 2002 with aBA in history and certification to teach high school socialstudies. He went right to work as a teacher, but after a few yearshe found himself increasingly frustrated with his work from thestandpoint both of professional fulfillment and financial reward.With his wife’s encouragement, he returned to school to seek anaccounting degree. Karen Wallace is an RN, and she and Robert feltthat her earnings as a nurse would suffice for themselves and theirtwo children until he was ready to return to the workforce.
Robert finished his MBA in 2010, but his search for a positionwent slowly, partly because of the recession but also because, atage 35, he was a good deal older than those he was competingagainst. After a succession of part-time bookkeeping jobs, hefinally landed a solid position with the accounting firm of CharlesCaldwell and Company. He was assigned to the Caldwell office inHamilton, Indiana (population 35,000). Besides Robert there is justone other accountant in the office: Jerry Bragg, who is a partnerin the company and thus Robert’s boss.
Charles Caldwell and Company is a long-established firm, whichis still run by its 74-year-old founder. It has traditionally beenstrong throughout Indiana but in recent years has faced toughcompetition from the big national accounting firms. Just lastspring Mr. Caldwell summoned all of the partners to a meeting inwhich he reviewed the situation. His words were relayed down toRobert and all of the other employees. “The only way we can beatthis competition,” said Mr. Caldwell, “is to provide morepersonalized and diligent service. This will be appreciated,especially in the smaller towns. Our survival depends on the localoffices’ keeping their customers happy.”
All these events provide the background to the painful dilemmain which Robert Wallace now finds himself. Several months ago heconducted an audit of the local bank. Because this was his firstmajor project, he was especially meticulous. Rather than justreview randomly selected loan files, he went through all the bank’sloans in order to gauge any financial vulnerability. No seriousproblems were found. More recently, Robert audited a local tractordealership. The dealership is owned by one Oliver Bigelow, who isalso the president and chief shareholder in the bank. Mr. Bigelow,a lawyer, has an interest in several other businesses as well. Byany reckoning he is the richest and most powerful man in town.
The audit of the tractor dealership is what disclosed theproblem. In the files for Robert to examine, the managerinadvertently left the record of a sizable loan from the bank.This, as Robert immediately understood, presented three majorproblems. First, because business at the dealership was poor, theloan was likely to be in default quite soon. Next, and far moreimportantly, the circumstances of the loan were highly irregular.Mr. Bigelow was, in effect, loaning money to himself. The normalprocess by which any prospective loan would be evaluated couldhardly occur, since Mr. Bigelow could see to it that the loan wentthrough. Finally, there was the fact, seemingly connected with thepreceding, that the record of the loan had been removed from thebank’s audit file. Robert had examined every loan in that file. Heknew the tractor loan was not in there. He now wondered what otherloans to businesses of Mr. Bigelow’s might have been concealed.
Robert brought this disturbing news to Jerry Bragg. Hissuperior’s reaction shocked him. He was ordered to drop the matter.“I will take over the audit of the dealership,” said Bragg. “I willtalk to Bigelow and see to it that the loan is taken care of. Ithas to be handled discreetly. We cannot afford to alienate Bigelow,or we will be out of business in this town.”
Robert protested that it is not an accountant’s job to “fix”things but rather to certify financial soundness or (as in thiscase) the lack of it. But Bragg cut him short: “I’m in charge ofthis office. It’s my responsibility, not yours. If you intend tokeep working for this company, then you stay out of this matter,starting right now.”
Without saying anything more, Robert left Bragg’s office. He hadno idea what he should do. He hated the thought of losing this job.Should he “blow the whistle”? If so, to whom? How far was heobliged to carry it?
