Farris Manufacturing Company produces component parts for the farm equipment industry and has recently undergone a major computer system conversion. Jay Moulin, the controller, has established a trouble shooting team to alleviate accounting problems that have occurred since the conversion. Jay has chosen Gus Swanson, assistant controller, to head the team that will include Linda Wheeler, management accountant; Cindy Madsen, financial analyst; Randy Lewis, general accounting supervisor; and Max Crandall, financial accountant.
The team has been meeting weekly for the last month. Gus insists on being part of all the team conversations in order to gather information, to make the final decision on any ideas or actions that the team develops, and to prepare a weekly report for Jay. He has also used this team as a forum to discuss issues and disputes about him and other members of Farris’s top management team. At last week’s meeting, Gus told the team that he thought a competitor might purchase the common stock of Farris, because he had overheard Jay talking about this on the telephone. As a result, most of Farris’s employees now informally discuss the sale of Farris’s common stock and how it will affect their jobs.
Required:
Is Gus Swanson’s discussion with the team about the prospective sale of Farris unethical?
Discuss, citing specific standards from the code of ethical conduct to support your position.
(CMA adapted)