ACCT 601 Week 3 Assignment: You-decide – Ethical Issue (GRADED A)

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You Decide ACCT601- Accounting Capstone Week 3-Individual Assignment In this week assignment, I was asked to analysis some questions to the following scenario. You have been invited t ... o attend a meeting where your immediate supervisor will be presenting a draft of detailed financial projections to the chief financial officer and a subsequent meeting with the company president. You’ve not been involved in the preparation of the analysis thus far but understand that you might have some tasks delegated to you after the meeting. In addition, you realize that the company is at a critical juncture from issues such as high attrition of the accounting staff, current economic conditions, and increased competition. You have recently been hired in the fairly small accounting department of a corporate business. The department is so small, in fact, that you may be called on at times for tasks ranging from simple bookkeeping, to preparation of financial statements and projections, and to perhaps even filling-in on the internal audit staff. One of your first responsibilities is to assist a senior level accountant with a detailed financial projection after input from the chief financial officer and the president of the company. Do you feel that there might be an ethical issues present? For moment, assume that no laws have been broken and just focus on any possible ethical issues. The first ethical issue that is present is me not being involved in any of the financial projection preparations. He clear stated that he has been up all night trying to work a positive cash flow. The ethical issues that I see would be manipulation of the numbers. In order to achieve positive cash flow you would need to leave out the accounts receivables and allowance accounts. I don’t feel that I can do a realistic summary because the numbers have been manipulated to achieve the right results. I have no past knowledge of the financial position of the company but based on the information given, I would be lying about the financial position of the company, to obtain a financial financing, which is unethical and illegal. This is called cooking the books. If you were going to report a suspected ethical issue, how would you do so? For instance, to whom would you report? Would you discuss the matter with anyone first? If I had to report the suspected of an ethical issues being commit I would first go to human resources to see if we have a hotline for the company. I would also schedule an appointment with the human resources department and outline my concerns. I would also contact the AICPA to let them do a full investigation on my concerns. This particular body investigates claims of unethical issues in the accounting profession. I wouldn’t discuss this matter with any of my colleges in my department because this would bring suspicious to me. I pretend that I was working on the project until I hear from both the HR and the AICPA. Would the manner in which you respond vary depending on whether this corporation was privately held or publicly traded? I would respond different depending on the type of company; because you are dealing with two different types of company. If it’s a public trade company it is governed by SOX. If it’s a private own company they are still required to comply but it makes it harder to prove. Their rules are made up by them; and they keep their ethical concerns within the company. If it’s a private company I really don’t think too much would be done. They would get a visit from the authority and hopefully this would change their unethical behavior. Does the fact that you have only been recently hired play into your decisions? No, I don’t think it would play into my decision as to report the company because you have to do the right thing in the accounting profession. I have had to walk away from two companies because of unethical accounting practices; that I didn’t want any parts of. If you are going to play along with their games you will be going to jail right along with them. SOX impose jail time for cooking the books. I want to be able to practice as a CPA. What possible sources of guidance might be available from a professional organization and/or your state’s regulatory body overseeing the accounting profession? I know there are several different guidance sources that you can use to report the unethical behavior to. The first one would be AICPA. They have a hotline that you can call and seek help as to how to report the situations. You can also contact your State CPA standards. They also have a department that handles the unethical behavior. Lastly you can contact the SEC. They also have a hotline to call. SO you have several resources to use when you notice are suspect unethical behavior in accounting departments. Lastly, please assume that you suspect that some state or federal laws have been broken. The problems might be beyond just a possible ethical issue, in other words. Would this change your handling of the situation? If this would result in some laws being broken, it would change the way I handle the situations. I would seek some legal counsel first and explain what I’m going to do. This will ensure that I have representation for myself. I would then ask how this should be done. Should I make a report with the authority or just report to the standards that I mention and let them handle the legal side. If they suspect or find any wrong and unethical behavior they are going to call the authority’s any way. I don’t want to jump the gun and contact the police. In conclusion, my answer wouldn’t change if the company was a public or private own accounting department. I would report what I know to the standard boards listed and HR to ensure that I have no parts in this situation. I have given my thoughts and answered the questions. [Show More]

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