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Financial Accounting Case Study

   

Added on  2020-05-16

10 Pages3160 Words111 Views
Running head: FINANCIAL ACCOUNTINGFinancial accountingName of the studentName of the universityAuthor note

1FINANCIAL ACCOUNTING-Table of ContentsIntroduction................................................................................................................................2Ethics and Governance:..............................................................................................................2Lack of integrity and transparency.........................................................................................2Lack of integrity and transparency.........................................................................................2Objectivity violation...............................................................................................................3Stakeholders...........................................................................................................................4Customers...............................................................................................................................4Communities and government...............................................................................................5Suppliers and the partners......................................................................................................5Creditors.................................................................................................................................5Accountant.............................................................................................................................5General Manager....................................................................................................................5Shareholders...........................................................................................................................6Effect of AASB 116...................................................................................................................6Conclusion..................................................................................................................................7References and bibliography......................................................................................................7

2FINANCIAL ACCOUNTINGIntroductionThe case study includes the issue of the accountant of the Sunshine Limited that has been approached by the general manger Kam Sunshine in order to make certain modificationsin the incoming profit of the firm in a discrete nature. It was then that Maria Mars faced the ethical dilemma on the renewal of her contract with the firm. It has been one of the major concerns of Maria. She knew that she was asked to execute a task that was unethical in nature. Apart from this she changes the technique of depreciation form the straight-line method to the sum-of-years-digits` method. In this particular case study the stakeholders that have been identified are the governments, communities, partners, general managers, suppliers, creditors and the employees of the organization. The report consists of some ethicalissues and they have been analyzed in the report. The report also includes a brief discussion about the violation of the regulatory policies of the company. These violations include the objectivity, transparency of the system and the breach of integrity. The method taken by Maria that is the undertaking action of the changing the depreciation method to straight-line has been discussed in the report in regards to adherence to AASB 116 (Abreu 2015).Ethics and Governance:The concept of ethics and governance revolve around principles. While speaking about morality this should be kept in mind that the issue of morality should not be forced to anyone. It is something that should come from within. Morals and ethics come from within a person. A person never learns the ethics and morals from external sources. It affects the performance of an employee in an organization. The identified issues that are related to ethicsand governance of Sunshine limited can be listed down as follows:Lack of integrity and transparencyThe shareholders of any particular organization have the complete right to know aboutthe profit that is the outcome of the investment. The final decisions are made depending uponthe change in the profitability in regards to their investment. This acts as a strong standpoint and a firm base of taking the decisions regarding the financial decisions regarding the shares in the organization. The change in the method of depreciation executed by Maria Mars and devised by the general manager Kam Sunshine had been done in order to satisfy the shareholders in order to gain the confidence of them and to gain their trust on their organization. This was done in order to make the shareholders make investment in their organization and to make them believe that the organization is dealing in certain profit. This justifies the lack of integrity and transparency in the financial statements of Sunshine Limited(Caglio and Cameran 2017). This was the instance where the company was seen to break the law of ethics.Lack of integrity and transparencyThe shareholders of any particular organization have the full right to be aware of the scope of profit that they can have by making an effective investment. Based on the change of their profitability in regards to their investment, they take the financial decisions of whether to keep the shares in the particular organization or to keep the shares somewhere else. The change that has been mentioned earlier that was executed by Maria Mars and that was supervised by the general manager had been done for the satisfaction of the shareholders. This broke the feature of transparency of the firm and it violated the integrity of the firm.

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