Answer
The ethical issue in this case is the inclusion or omission of the new pronouncement by the FASB that materially affects net income and harms particular stakeholders. Accountants must recognize that their decision to implement (or delay) reporting requirements will have immediate consequences for some stakeholders.
Work Step by Step
Once the FASB makes a new pronouncement affected organizations have a period of 12 months to implement the new rule. The vice president intentionally delayed implementation because it would cause adverse effects on the net annual income, which would stain his image.
