Ethical Decision Making in Accounting
Added on 2020-03-16
17 Pages5973 Words76 Views
FinanceLeadership ManagementProfessional Development
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ACCT19083 Final AssignmentTerm 2, 2017Student ID:..................................... Student name..............................................................Marker’s overall comments:The markers may include any final comments here.Overall Mark (Total) out of 40:0
Part A Question 1: Did Buddy, Troy and Betty give informed consent to making the requested accounting adjustments? Explain your answer. You should also explain the concept of "informed consent" before answering the question.Buddy, Troy and Betty never gave informed consent in making the requested accounting adjustments. These middle-level accountants were accomplishes of their superiors because they assisted them to overstate the earnings of WorldCom in a scandal that ruined the company. According to the Associate Press, an informed consent is based on the one’s judgment and founded on the acceptable principle of accounting[ CITATION Ass05 \l 1033 ]. Without a doubt, an informed consent is given freely without coercion. It is a free and deliberate choice that employees understand the full ramifications and consequences of such actions[ CITATION Geo12 \l 1033 ]. An informed consent is legitimate and valid. The three junior accountants were required to rely on the justification in case of overstating the company’s accounts. Buddy, for instance, took the orders of his superiors to overstate the company’s books to meet the expectations of Wall Street. For accountants, their code of ethics expected them to rely on justification and material evidence to support their activities.The mid-level accountants violated the ethics in accounting that gives the ethical guidelines to all the accounting officers. Accounting ethics is interesting because it puts responsibility on the individual accountant. The three accomplishes engaged in preparing a misleading statements that compromised the interests of shareholders and investors. The involved officers abated the fraud because they introduced line cost and false disclosures based misstatements thus enhancing the fraud[ CITATION Ass05 \l 1033 ]. The misstatement proved injurious as it led the company to the drains. The top management thus making the lenders, employees, and stockholders victims perpetuated the misstatement of WorldCom financial statement. The accountants violated the accounting ethics bymisstating line costs, releasing the accruals, and capitalizing on the line costs to please the Wall Street.The warning signs were also evident that the company was headed to a wrong direction. The accountants engaged in a fraudulent financial reporting that was eventually unearthed. Indeed, even the internal auditor never raised the red flag despite the warning signs. This was in contravention of the general acceptable accounting practices. The external auditor worsened the situation by avoiding the act on the fraud. However, when the SEC requested for the documentations, the company could not produce. The SEC discovered the telecom giant improperly accounted for $3.8 billion regarding its expenses[ CITATION Ass05 \l 1033 ]. The accountant used internal transfers within the firm’s capital expenditure accounts and large loan worth $400 million.References:Associate Press. 2005, September 8. Ex-WorldCom exec gets one year in prison. NBC News. http://www.nbcnews.com/id/8883439/ns/business-corporate_scandals/t/ex-worldcom-exec-gets-one-year-prison/#.WdmE9ztx1dgGeorge W Russell. 2012, April 22. Anderson, auditing and atonement- The accounting profession 10 years after enrol.
http://www.gaaaccounting.com/andersen-auditing-and-atonement-the-accounting-profession-10-years-after-enron/.Marker’s Comments: The marker will provide feedback here. Mark (5):0Exceeds Expectations(High Distinction) 85-100%Exceeds Expectations (Distinction) 75 - 84%Meets Expectations (Credit) 65 – 74%Meets Expectations (Pass) 50 – 64%Below Expectations (Fail) below 50%Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources.Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources.Demonstrates a good level of knowledge of some of the core conceptsby providing some level of analysis. Utilises somecurrent, appropriate and credible sources.Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources.Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.Quality of writing at a very high standard. Paragraphs are coherentlyconnected to each other. Correct grammar, spelling and punctuation.Quality of writing is of a high standard. Paragraphsare mostly well structured. Few grammar,spelling and punctuation mistakes.Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes.Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language.Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions.The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
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