Acc 100 Ethics in Accounting

Description

Effective financial reporting depends on sound ethical behavior.  Financial scandals in accounting and the businesses world have resulted  in legislation to ensure adequate disclosures and honesty and integrity  in financial reporting. A sound economy is contingent on truthful and  reliable financial reporting.

Instructions:

• Read the following scenario.
• Answer the questions that follow. This will be a 2-3 page  submission in a question and answer format (also in paragraph form). An  introduction and conclusion is not required.
• Refer back to your textbook for guidance on how to think through the scenario.

You have been recently hired as an assistant controller for XYZ  Industries, a large, publically held manufacturing company. Your  immediate supervisor is the controller who also reports directly to the  VP of Finance. The controller has assigned you the task of preparing the  year-end adjusting entries.  In the receivables area, you have prepared  an aging accounts receivable and have applied historical percentages to  the balances of each of the age categories.  The analysis indicates  that an appropriate estimated balance for the allowance for  uncollectible accounts is $180,000.  The existing balance in the  allowance account prior to any adjusting entry is a $20,000 credit  balance.

After showing your analysis to the controller, he tells you to change  the aging category of a large account from over 120 days to current  status and to prepare a new invoice to the customer with a revised date  that agrees with the new category.  This will change the required  allowance for uncollectible accounts from $180,000 to $135,000.  Tactfully, you ask the controller for an explanation for the change and  he tells you “We need the extra income, the bottom line is too low.”

Required:

In a 2-3 page paper, discuss the following:

1. Consider what you have learned relative to ethics and financial  reporting. What is the rationale for the calculations/process used to  estimate the $180,000 uncollectible allowance?
2. How do you think the misstatement of funds will impact the income statement and balance sheet?
3. What is the ethical dilemma you face? What are the ethical  considerations? Consider your options and responsibilities as assistant  controller.
4. Identify the key internal and external stakeholders. What are the negative impacts that can happen if you do notfollow the instructions of your supervisor?
5. What are the potential consequences if you do comply with your supervisor’s instructions? Who will be negatively impacted?

Additional Requirements:

• Use at least one (1) quality academic resource (in addition to your textbook) for this assignment. Note: Wikipedia and similar websites do not qualify as academic resources. You have access to Strayer University’s Online Library at https://research.strayer.edu and the iCampus University Library Research page at https://icampus.strayer.edu/library/research.

Your assignment must follow these formatting requirements:

• Your paper should be double spaced (Arial or Times Roman 12 pt  font) and follow general Strayer Writing Standards (SWS) as they relate  to references and citations. Please take a moment to review the SWS  documentation for details (more information and an example is included  in the Strayer Writing Standards menu link located in your Blackboard).
• Include a cover page containing the title of the assignment, the  student’s name, the professor’s name, the course title, and the date.  The cover page and the reference page are not included in the required  assignment page length.