Ethical Issues in Accounting : Assignment

Added on - 22 Jul 2020

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Accounting assignment
Table of ContentsINTRODUCTION...........................................................................................................................1Question 1........................................................................................................................................1A. Stakeholders which are included............................................................................................1B. Reasons behind Freda demand...............................................................................................1C. Various ethical issues which are involved..............................................................................2D. Can Lucia remain ethical by entering wrong amounts...........................................................2Question 2........................................................................................................................................2Question 3........................................................................................................................................5CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7
INTRODUCTIONIn business there are various aspects which are required to be taken into consideration sothat proper functioning can be carried out. In this report three questions will be answered whichwill be covering different points (Kew and Watson, 2010). Firstly the principles in respect ofethics and governance will be discussed. Then ledger accounts and trial balance will be preparedin the manner which has been specified. Together with them an essay will be provided in whichmanner in which breach of ethical standards shall be considered will be described.Question 1A. Stakeholders which are included.In any business there are various stakeholders who are involved. It will be required thatthey shall be identified so that while carrying out operations there interest will be considered(Warren and Young, 2011). The stakeholders which are present in the given case are:All the shareholders whether they are present or potential of Vroom Limited.Lucia, accountant of companyFreda Chuse who is manager of given entity.B. Reasons behind Freda demand.In the given case it is provided that Freda who is manager of Vroom Limited is askingher accountant Lucia to show less amount of profits in financial statements. She is doing so ascurrently a grant is being provided to company by government of $100000 in order to carry outproper training of apprentice mechanics and if higher profits will be reported then there arechances that it may be lost (Zhang and et. al., 2012). It is provided that bonus will be increased if$3 million are earned and will remain at same level thereafter. So there will be no additionaladvantage which will be gained by company if profits are reported at $3.5 million. So it will bedetermined that if any increase in bonus is possible during current period as otherwise it will bebeneficial for it to defer all the amount which has been earned in excess of $3 million. By doingso the risk associated in respect of withdrawal of grant by government will be eliminated andalso there will be no negative impact which will have to be borne in respect of bonus amount. Soall of these are some of the reasons due to which such condition is put by Freda.1
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