Reference no: EM133329751

Question 1.

The bankruptcy process within the U.S. can happen for various reasons. Personally, I feel as if it dramatically Impacts those individuals and firms that have too much outstanding debt. Within this scenario, these individuals and firms can take advantage of planning out future finances and repaying owed debt. However, an ethical issue arises as bankruptcy has become a disputable topic. For example, in 2015 notable rapper 50 Cent filed for bankruptcy protection after a court ordered him to pay $5 million in a lawsuit. Bankruptcy protection should be held ethically and reasonably within these circumstances alone. One company that utilized bankruptcy in 20011 as a business opportunity was American Airlines, which returned its dividends as early as 2014.

Question 2.

Taking security for a debt is simply a way of collateral. Creditors who do this will have priority over competing creditors if the debtor files for bankruptcy or if the debtor otherwise defaults on its obligation to the creditor. A creditor may engage in a transaction that is not secured by collateral if a guarantor is applicable. This can be as if the debtor defaults on a payment the guarantor would be held liable.

Question 3.

From my position it is fair that accountants should be held liable under securities laws. It is the accountant's obligation to perform quality work for creditors, investors, and businesses. It's one thing to lie or make a mistake in the books and be held liable, however, to be deceived by management for fraud is another argument. There should be some guidelines to prevent accounts from falling into this potential career wrecker.

Agree or disagree with each statement?