Ethical Dilemma Camp industries is involved in a lawsuit towards the company. The lawyers in this case felt as though they will not be winning the case and will lose a approximated amount of thirty million dollars. Now when the company is told that will be close to the amount due to be owed, is when the problem of when to report the amount came into play. In a case like this it is rare for a company to accrue the amount on loss contingency without knowing the true and full amount. In accrual based accounting the measuring of the entity’s and resource sacrifices during the period, regardless of when the cash is gathered or paid out (Spiceland, G-0). When the company talks about a loss contingency it is a uncertain situation that involves potential loss depending on whether some future event occurs (Spiceland, G-1). When you look at this the question is to either put the loss in without knowing the amount, or wait until the full amount on the settlement is reached? The ethical dilemma here is when to report the amount when the full settlement of the lawsuit is reached or to report the accrual loss contingency of the amount estimated. This is ethical problem because the person who is posting it and person reviewing it are faced with more then one option on what to do with the loss. No one person knows the right decision right away and that is what makes this a huge dilemma with the company. Now the stakeholders in this situation are the chief financial officer, the CEO, and the person posting the amount to the books. The CFO is the one who looks over all the decisions made by everyone under him. So if he is wrong by what he says to do then it is on him for the wrongful reporting of the amount. This could result in a audit of the companies financial books and if there is a big enough problem then everyone involved is under review. This is where the CFO, CEO, and person reporting it have an ethical dilemma because all three will have their jobs examined to see if they made the right choice. It not only affects the company and its financials but also the stakeholders and the jobs they hold as well. There is a huge list of values that go along with this case, the one that stands out to me the most would be responsibility to users of financial statements. The people who are not only reporting the statements, but also the people who look them over should know how and what to look for. They should know the rules and what should be reported when, so there is no reason to question what is being done. Just like in this case they know that the right kind of posting is going to come down to the responsibility of the reporter and higher ups. Honesty is a huge value with his kind of reporting as well, they have to be honest to the company and its statements. If they are dishonest it can lead to again job reviews and also criminal punishment in the end. So if the reporter or the CFO are dishonest about the amount or where it should be then it becomes an issue of the honesty policy. Loyalty to the company I think plays the biggest role in this one. If someone loves the company and their job then they are going to be loyal to the statements as well, and know what is right and wrong. Values play a huge role in this case because it’s all on how they like the job they have and the company and honesty to follow with it. The courses of action that I would consider besides just this one would be to look at if there is a possible case of having to report less or more. Then look at if it would really affect the financials for the year and for that period as well. I would look at the course of action of seeing if that lump sum was going to be taken at one point and would wait until the settlement was agreed upon. Then I would report it to the financial statements on the lump sum amount. But then there is a way to have that money be on a payment option for the company as well. SO if it is on the payment option then you have to show for…
Course 1: Ethics Businesses and Management
Introduction----what is business ethics?
The textbook says ‘ethics in management is concerned with those parts of organisational, operational, occupational and professional conduct that relate to absolute standards and moral principles.’1
Absolute standards and moral principles are always varying due to different views. For example, foods from fast/convenience restaurants like McDonalds and Burger King are unhealthy. On one hand, the manager does not…
6-page essay discussing ethics and governance in business. It identifies one specific organization and critically evaluates its performance in relation to the key principles of business ethics. It provides background information about the organization, information about ethical dilemmas within the organization and possible ways these dilemmas can be solved. It relies on 15 sources and is presented in Harvard format.
Enron and Ethics
Enron is an American company based in Houston, Texas…
Ethical Standards for Management Accountants
By Tom Parnelle
Instructor: Dr Earl Godfrey
Course: Managerial Accounting
December 11, 2011
Ethical Standards for Management Accountants
In today’s economy, it is important to make informative business decisions. Profit margins are shrinking, labor and material costs are rising and global pressure on our markets continues to tighten (Sider Group 2009). To be competitive in a global or even local market, managers must understand the…
17 April 2013
ETHICS IN BUSINESS AND ACCOUNTING
Ethics in business is an extremely important characteristic for a successful business person to have. Ethics is defined as codes of conduct by which actions are judges as right or wrong, fair or unfair, honest or dishonest. The most important part of being a successful business person is gaining trust from your boss, peers, and customers. Without the trust of your boss, peers, and customers there is no possible…
comparative? I never thought about this question before.
In financial accounting, the balance sheet and income statement are the two most import types of financial statements. A balance sheet lists assets and liabilities of the organization as of a specific moment in time, i.e. as of a certain date. An income statement is a report for income and expenses over a specific time period, usually a quarter or year. It shows how a company has performed by listing sales and expenses, and the resulting profit…
Verizon Financial Analysis
Maria G. Rodriguez
Financial Statement Analysis
Professor Wendy Achilles
August 19, 2011
The following is financial analysis comparing the most recent three years of data from communications company Verizon. The competitor to be compared is the most recent year of at&t. The most recent year will begin at 2010 and go as far as 2008.
This includes an analysis of both financial ratios and common size percentages…
Primark; Nestle and McDonald’s, and the brand damaging reports about them in the media. Why the companies have a commitment to their stakeholders and the consequences of ignoring them.
One of the most important things to consider when running a business is your company's reputation. This can severely be affected by stakeholders, a stakeholder could be anyone with even a slight interest in what your company does or what it's beliefs are. “A stakeholder is an individual or group, inside or outside the…
Ethics in accounting is of utmost importance to accounting professionals and those who rely on their services. Certified Public Accountants (CPAs) and other accounting professionals know that people who use their services, especially decision makers using financial statements, expect them to be highly competent, reliable, and objective. Those who work in the field of accounting must not only be well qualified but must also possess a high degree of professional integrity. A professional's good reputation…
Do Ethics Classes help Accounting Students
This paper describes a case study of the experiences and attitudes of Accounting educators and students regarding the effects of ethical courses for there major. I present professional educators options on how the classes should be implemented, and interviews with Ole Miss alums with their degrees in Accounting. The purpose of the study is to gather information concerning the content and reliability in university ethics courses.…
A Breach of Professional Accounting Ethics
Professor Dr. Jacob Angima
Financial Accounting ACC 557
October 30, 2012
A Breach of Professional Accounting Ethics
Based on the corporate ethical breaches in recent times I believe that the current businesses and regulatory environment is more conducive to ethical behavior due to the workplace. In the workplace ethics develops an atmosphere of respect and tolerance for everyone, by striving to conduct business in a manner…