Accounting Professional Code of Conduct
Added on 2020-04-01
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Running head: ETHICAL ACCOUNTINGEthical AccountingStudent’s Name:University Name:Author Note:
1ETHICAL ACCOUNTINGTable of ContentsQuestion 1..................................................................................................................................2Answer to Part A:...................................................................................................................2Answer to Part B:...................................................................................................................2Answer to Part C:...................................................................................................................2Answer to Part D:...................................................................................................................3Question 2..................................................................................................................................4Question 3..................................................................................................................................6Answer to Part 1:....................................................................................................................6Answer to Part 2:....................................................................................................................7Answer to Part 3:....................................................................................................................7Referencing................................................................................................................................8
2ETHICAL ACCOUNTINGQuestion 1Answer to Part A:The stakeholders in this situation are, the manager of Vroom Ltd, Freda Chuse and theaccountant herself, Lucia and all the acting and present shareholders of the company.Answer to Part B:Freda asked Lucia to find ways of deferring recognition of as much revenue aspossible for the next financial year because Freda anticipated the fact that the total earnedrevenue for the financial year ending 30 June, 2016 being $3.5 million would definitely be ahindrance. This is because too much revenue if earned by the company then the governmentwould refrain from paying Vroom Ltd the grant for training apprentice mechanics and thecompany would lose upon $100000 tax-free cash inflow (Zadek, Evans and Pruzan 2013).The other reason for Freda to ask Lucia to do this is, as stated in the question, Freda’s bonuswill be maximized when the firm earns $3 million therefore she will not receive any kind ofbenefit for revenue earned of $3.5 million. However according to the estimations of Freda thenext financial year will not observe such higher amounts of profit so it is in her best intereststo forward the excess of $3 million to the next financial year. This will not only maximize herbonus earned but also help in maintaining the goodwill of the company by removing thenegativities that a poor financial statement may have (Tweedie et al., 2013).Answer to Part C:The ethical issues that may arise in this situation is that Lucia due to the unjustifiedpressure from her manager succumbs to the pressure and commits the unethical task asdemanded by her manager, Freda. Another reason for Lucia to commit such a task is that shedoes not want to risk her own opportunities for promotion by upsetting her manager. The
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