Reference no: EM132286216 , Length: word count:800
Scenario or Tasks
Cyber Virtue - Case Study
Cyber Virtue LLC is company formed in April 2015 by Ahmed, which provides business consulting, information technology and outsourcing services. Ahmed is an IT engineer, who has several years of experience in the field before starting Cyber Virtue. The company does not have a board of directors, strategic decisions are made by Ahmed. The venture capitalists, Axpert Ventures LLC has invested OMR 1.5 million as venture capital to start the business and in return received equity shares of Cyber Virtue LLC
The financial review meeting was held to discuss the financial performance of the company for the year ended 315' April 2018. During the meeting Ahmed requested for additional capital from Axpert Ventures, for expansion of business. By raising the concern on the inability of the management to increase customer orders and earn profit, the venture capitalist did not accept the proposal given by Ahmed.
The extracted information from the income statement for last three financial years are as follows;
|
|
2018 |
2017
|
2016 |
|
Sales Revenues
|
1,000,000.00
|
1,450,000.00
|
750,000.00
|
|
Cost of Sales
|
(600,000.00)
|
(740,000.00)
|
(475,000.00)
|
| Gross Profit |
400,000.00
|
710,000.00
|
275,000.00
|
|
Administrative, installation & servicing expenses
|
(194,000.00)
|
(157,000.00)
|
(105,000.00)
|
| Marketing cost |
(106,000.00)
|
(95,000.00)
|
(135,000.00)
|
| NET PROFIT |
100,000.00
|
458,000.00
|
35,000.00
|
After the financial review meeting held with the Venture capitalist, as the Axpert Ventures disagree to inject additional capital for the expansion of business Ahmed had decided to go for a bank loan. Ahmed hired Al Hassen Auditing & Accounting Services to conduct an audit of its financial statements to present the audited financial statement to a local bank for a loan.
A1 Hassen Auditing & Accounting Services assigned three auditors to conduct the audit in Cyber virtue, including suhail (Audit supervisor), Aysha & Rehab. During the audit Aysha, the junior auditor discovered that OMR 90,000 of accrued expenses had not been recorded in the financial year ended 31st April 2018.
Aysha informed Suhail about the uncovered accrued expenses, and Suhail (the audit supervisor) tried to cover-up the matter by by informing Aysha that the OMR 90,000 of expense and liability could not be recorded. Also, he went further by warning Aysha of the consequences if she pursues the matter any further as he already learnt about the unrecorded OMR 90,000 in accrued expenses through Ahmed (CEO of Cyber Virtue). And added that Ahmed had requested them to delay recording the expenses until after the loan is secured.
1. Critically evaluate and recommend the ethical decision that could be made by Aysha to resolve the ethical dilemma (use Giving Voice to Values approach in resolving the ethical dilemma).