Case Study
Is Physicians Medical Inc. acting in the best interest of Sunset Medical, P.C.? Did actual revenues jump by
over $400,000 in 2019? Are the Financial Statements prepared by PMI correct? Is there sufficient
motivation for PMI to provide the services needed to support Sunset Medical, P.C.? What ethical
dilemmas face PMI?
1. Examine the 2019 financial statements provided by PMI and the 2018 financial statements provided
by Jackson and Associates to answer the following. (Accounting questions)
a) Discuss the differences in the Financial Statements and the effect that these differences have on
the Revenues and Receivables.
b) Discuss the ethical dilemma facing PMI in terms of preparing the Financial Statements.
2. Examine the contract and discuss how the contract language may be altered to reduce the ethical
dilemma facing PMI. Additionally, how may the contract language be altered to provide incentives for
PMI to perform in a manner that is more in line with desires of Sunset Medical? (Finance question)
3. Should PMI’s management and billing services be retained or should Dr. Jones bring the management
and billing functions back in house? (Finance question)
