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Ethics in accounting : Assignment

   

Added on  2021-04-17

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Running head: ETHICS IN ACCOUNTINGEthics in AccountingName of the StudentName of the UniversityAuthor’s Note

1ETHICS IN ACCOUNTINGAccording to the provided case, it can be observed that Linbarger Company has theaccounting obligation to maintain a minimum balance of $200,000 or more in their cash accountdue to the loan agreement with the insurance company. However, at June 30, the company doesnot have the required balance in the cash account. In this context, it needs to be mentioned thatthe company is facing compliance issue in accounting as they have failed to maintain therequired balance in their cash account for the loan from the insurance company (Thomas, 2012).As per the provided case, it can be observed that the Lisa, the financial vice president ofLinbarger Company has advised to close the cash account for one more day despite of the end ofthe month so that the check of $150,000 can be received to maintain the desired cash balance.This action has breached some of the major ethics in accounting profession. As per the principleof Professional Behavior, the accountants are required to comply with the rules and regulationsof accounting (heacademy.ac.uk, 2018). In addition, the principle of Integrity states that it is theaccounting obligation on the accountants to be straightforward and honest at the time ofproviding the accounting services. However, in case of Linbarger Company, the action of Lisahas violated these two major ethical principles of accounting (researchgate.net, 2018).In this context, it needs to be mentioned that in case the assistant controller does notfollow the instruction of Lisa to open the book of cash account for one more day, the companywill be failed to maintain the required amount in the cash account; and thus, the company will beconsidered as defaulter in the loan agreement. For this reason, Linbarger Company will be haveto face two consequences. First, due to be defaulter, the company will need to repay the totalloan amount at one time. Second, Linbarger Company will not be able to take any loan from thatinsurance company. In both the cases, the goodwill of the company will be affected. Most

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