Question

Keesha is the CEO of a publicly-owned company. She was informed by the CFO that the company's earnings were down 30 percent from the prior year due to the recession. The company's stock price has declined by 20 percent. The CFO comes up with a scheme to hide debt and inflate revenues by selling underperforming assets to a special purpose entity affiliated with the company. Keesha is concerned about possible effects on the creditors, but ultimately, she agrees to the accounting. Keesha is reasoning at:

stage 1.
stage 2.
stage 3.
stage 4.

Answer 1

Answer:

Stage 2

Explanation:

The first four stages of Kohlberg's model of moral reasoning:

1. In stage 1, moral reasoning is based on the fear of punishment.
2. In stage 2, moral reasoning is based on individualism and what is best for the individual only. She knows that what she is doing is wrong, but agrees to do it anyway because she will benefit from it.  
3. In stage 3, moral reasoning is based on acting in the best interests of others.
4. In stage 4, moral reasoning is based on duty to society, respect for authority, and maintaining the social order.