This is what is commonly known as the Euthyphro's dilemma
I can show everyone to the excellent podcast on Dr. William Lane Craig's podcast on it on his website.
It is a common objection that atheist have against the moral argument for his existence.
Here is the link to the podcast
http://www.rfmedia.org/RF_audio_video/RF_podcast/Euthyphro_Argument_Revisited.mp3
The dilemma in the end is not really a dilemma because the Christian can posit a third option that defeats the horn of the dilemma. It is in the end a false dilemma
How can people say that philosophy is dead when people still talk about a 2500 year old philosophical problem?
In a nutshell.
The Euthyphro dilemma is actually a false dichotomy. That is, it proposes only two options when another is possible. The third option is that good is based on God’s nature. God appeals to nothing other than his own character for the standard of what is good, and then reveals what is good to us. It is wrong to lie because God cannot lie (Titus 1:2), not because God had to discover lying was wrong or that he arbitrarily declared it to be wrong. Therefore, for the Christian, there is no dilemma since neither position in Euthyphro’s dilemma represents Christian theology.