Version:1.0 StartHTML:0000000181 EndHTML:0000005559 StartFragment:0000002371 EndFragment:0000005523 SourceURL:file://localhost/Users/cameronmiller/Documents/lissybabeACCT.doc
Alissa Montgomery
ACCT 202
Paper 2
3-1-10
According to the author, Office Depot has committed two specific wrongdoings. Of these include violating Regulation FD by leaking information to financial analysts regarding a civil penalty and also investigation involving vendor payments, intercompany loans, and other accounting concerns. More importantly, Office Depot has been accused of overcharging city and state municipalities by as much as $100 million per year.
Severe costs may follow these allegations. Firstly, the company and CEO Steve Odland will more than likely develop a poor brand reputation; San Fransisco and Lee County have already switched their contracts to competitor Staples because of these discrepancies. Other organizations, such as external accounting firms, may be weary to work with Office Depot or consequently may feel the need to examine the company much more closely. Wholesale manufacturing companies that supply Office Depot with its products may discontinue their commerce with the company in order to maintain their own status. Usual and future customers may seek business at rival industries due to the negative claims. Not only will these possible outcomes result in massive loss of revenue, but the reimbursement of municipalities will cut extremely large costs into the company, as well. Transgressions such as these can lead a company to bankruptcy and potential extermination.
Both situations could have been avoided with a more loyal and ethical team of employees and meticulous auditors. Countless companies succeed, with setbacks, but not as detrimental as Office Depot’s. Office Depot’s new centralized ordering system, ethics training, and “open door” policy that have just been recently implicated may have prevented these discretions from happening in the first place. If I were running the company, I would have applied these ethical strategies at the onset of the company along with other third-party monitoring peoples and facilities. Codes of ethics may have been applied here but not actively complied with; I would have hired an ethics officer. Also, these ethics should not solely be applied when fault occurs but at all times. In addition, I would have become involved in social media forums, such as Facebook or blogging websites, which provide a connection to consumers and allow for promotion and defense against accusations.
