KNOCK

Etudes

KNOCK! KNOCK! In walks the IRS at Valley View Hospital saying they have a declaration from a judge allowing them to search through all the financial records and all computer files related to suspected fraud. The question here is how we got here. Well, it all started when Sue Kolb discovered that Bronco Resources Inc. was using an accounting system which caused the hospital to cheat the government on Medicare payments. Based on a further investigation by Sue, it was discovered that Bronco Resources Inc. kept two books one of which with the correct amounts and one that had overstated cost intended for payment by the federal government. So, Sue then went to her CEO and presented her findings, which ended in her CEO saying she would be fired if she did go through with frauding the government. In the coming paragraphs is a detailed analysis of identifying the stakeholders and their interests in this case, acknowledging Sue’s ethical obligations, and what I would do if I was in her shoes because many people’s lives are at stake, especially Sue whose career is on the line.
Sue Kolb, Valley View Hospital, CEO of Valley View Hospital, Bronco Resources, Inc., employees of Valley View Hospital, patients of Valley View Hospital, board of trustees of Valley View Hospital, investors of Valley View Hospital, and the U.S. government are all stakeholders that have interests in how this case turns out at the end of the day. The first stakeholder is Sue Kolb because she is the CFO and the person who discovered the fraud. Her interest is in protecting herself from being targeted as the guilty party because how this case ends will determine what the community thinks and writes about her. Another interest she has is protecting Valley View Hospital because she oversees protecting the financial standing of the hospital. Valley View Hospital is the second stakeholder whose interest is to serve sick and preserve the condition of people. Another interest is the reputation of the hospital because not many people want to go to a hospital that does not handle money correctly. CEO of Valley View Hospital is the third stakeholder because he is responsible for ensuring the hospital is performing to the best of its abilities in all aspects of the business. His interest, in this case, is that he wants to make sure he does not get caught saving a quick buck, which he could use for really anything he chooses. But also, he is interested in his reputation because he wants the numbers to look better than they do for one or many types of benefits such as a bonus. Bronco Resources, Inc. is the fourth stakeholder because they are the ones who are using a secret accounting system that cheats the government out of money. Their interest in this situation is to cheat the market so they can get an advantage in the financial reporting department. They also have interests in their reputation because who knows what other companies they oversee doing their books. Employees of Valley View Hospital are the fifth stakeholder because some of them need this job at the hospital to support their family, so if the hospital must shut down due to fraud, they will not have a job. The board of trustees of Valley View Hospital is the sixth stakeholder because essentially, they are worried about their reputation since they are the ones that hired Bronco Resources Inc. This brings into question whether the board of trustees knew about how Bronco Resources Inc. cheated the government and how well did they really investigate that accounting firm. The U.S. government is the seventh stakeholder because they are getting cheated out of money, but the real question is how far they are going to go to get their money and what type of example are they going to make out of Valley View Hospital.
As part of being a certified public accountant, she must exceed AICPA Code of Professional Code values every day no matter the activity: “responsibilities, the public interest, integrity, objectivity and independence, due care, and scope and nature of services of a CPA to uphold their commitments to the community.” Based on those standards, Sue Kolb’s ethical obligation, in this case, was to gather information about the fraud and report it to the CEO and the government because it is in the best interest of the public and her responsibility to report that the hospital was cheating the government.
If I were in Sue’s shoes, I would document everything and gather evidence of my innocence because it is very likely that the CEO will try to blame Sue for cheating the government. This leads me to record the conversation with the CEO about Sue getting fired if she reports that the hospital is cheating the government because, if necessary, I can present the recording to the federal agents to protect my innocence. Then, I would contact the federal authorities, explain the situation I have gotten myself into, and present my evidence.
To conclude, this case of Valley View Hospital tests a lot of people’s integrity because this is an internal conflict. So, based on the information on the case the CEO and Bronco Resources Inc. has very little integrity because they knowingly committed the illegal act and wants it to go to the wayside. However, Sue Kolb is willing to make the conflict known because her integrity causes her to tell the CEO of the hospital, but the real dilemma is what does she do when her boss threatens to fire her if she tells anyone about the fraud. Throughout this paper, it examines the stakeholders and their interest in their life and career. Then it talks about Sue Kolb’s ethical obligations to her situation and what I would do in this situation because this situation starts and ends many people’s careers due to a fraud case such as this. In the end, Sue Kolb has a huge responsibility to herself and the public, but whether she does the right thing is up to her because, in the end, it is her life and her career at stake.