The tobacco companies have paid billions because of smoking-related illnesses. In particular, Philip...

Question

The tobacco companies have paid billions because of smoking-related illnesses. In particular, Philip Morris, a leading cigarette manufacturer, paid more than $3,000,000,000 in settlement payments in one year.

Requirements

1. Suppose you are the chief financial officer (CFO) responsible for the financial statements of Philip Morris. What ethical issue would you face as you consider what to report in your company's annual report about the cash payments? What is the ethical course of action for you to take in this situation?

2. What are some of the negative consequences to Philip Morris for not telling the truth? What are some of the negative consequences to Philip Morris for telling the truth?

Instructions:Your initial response should be no less than 250 words.. In-text citations and references may be in APA format

Robert · Accepted Answer

ANSWER 
The tobacco business is a flourishing and profitable business inspite of the health risks associated 
with it. Philip Morris has paid a huge sum of $3 billion in settlement payments in a year. This is 
a huge amount and is material to the stakeholders of the business.  
As CFO of the business, I would face an ethical dilemma of whether the true reason for the 
payments should be disclosed in the financial report or not.  There would be pressure from the 
management to conceal the payments.

The tobacco companies have paid billions because of smoking-related illnesses. In particular, Philip Morris, a leading cigarette manufacturer, paid more than $3,000,000,000 in settlement payments in...

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