Reference no: EM135270

Question 1

Margaret is an accountant for BigCorp Ltd. Whilst attending the company's centenary celebrations in April Margaret was approached by Bob, the Director of Sales and Marketing. Bob wanted to express his concerns about BigCorp's future prospects. He informed Margaret that turnover was unlikely to meet the year's targets, mainly due to the economic downturn and increased competition from on-line businesses, unless measures were taken soon to increase sales. "I won't get my bonus at this rate" Bob said. Bob had a plan though, which he revealed to Margaret. He was going to offer incentives to customers to prompt them to buy more products from BigCorp, thereby increasing sales for the 4th quarter and overall for that financial year. Margaret explained to Bob that by doing so sales in future periods would be lower, any costs associated with the incentives or with manufacturing the inventory would be unnecessary and would result in reduced profits, and if these profits were then used to make decisions the conclusions made could be suboptimal. Bob refuted Margaret's response by insisting he was doing this to protect jobs and the future of the company.

During the same conversation Bob also revealed to Margaret the company was about to commence preparing a tender for a contract with an overseas buyer worth up to $50 million. Bob was determined to see BigCorp secure this contract in order to safeguard the company's future and told Margaret of how he had a mate who owed him a favour. He had asked his mate to obtain a copy of BigCorp's main competitor's draft tender documents for the overseas contract. Bob was planning on ensuring that BigCorp's tender was a more lucrative arrangement for the client. When Margaret questioned Bob about the integrity of these events Bob dismissed her concerns by maintaining that without this contract the manufacturing plant in Dubbo would be closed, resulting in 750 job losses.

Required:

Margaret has come to you for advice on how to proceed with the information Bob divulged to her at the centenary celebrations.

a) Identify the ethical issues within the scenario that would concern Margaret;

b) Describe to Margaret the two main normative ethical theories;

c) Advise Margaret of an appropriate decision from the teleological ethical perspective of 'utilitarianism'. Explain why it is based on 'utilitarianism'. Also explain to Margaret what the critics of teleological ethics would say about her using this perspective to base her decision on.

d) Advise Margaret of an appropriate decision from the deontological ethics perspective. Explain why it is based on deontological ethics.

Question 2

a) Describe the key historical events up to 1900 that have shaped the development of accounting.

b) How do these events support the notion accounting is socially constructed?

c) What arguments and evidence is there to suggest that accounting can influence society?

d) Which perspective do you agree with and why?