Reference no: EM131345099

Question 1

John Smith, a junior accountant at Dynamics Engineering was working on cost allocations to completed jobs for the month. The cost sheet for GOVT360 showed 100 hours of direct labor. John's supervisor altered the job cost sheet to allow for 150 hours which increased both the direct labor and overhead cost for the job. When John asked about this, his supervisor stated that because this was a government job, it was billed at "cost +" so the more costs allocated to the job, the more profit Dynamics Engineering would make. She also stated that the excess hours would cover follow-up work on the job.

1. Discuss Dynamics Engineering costing procedures. Why does overhead cost increase when direct labor hours increase?

2. Discuss John Smith's responsibilities in light of the IMA's statement of professional conduct. What are his responsibilities with respect to the 4 standards of ethical conduct? What are the steps John should take in resolution of the ethical conflict (use the IMA's resolution of ethical conduct as your guide).

3. How would you handle the situation?

Rerspond to this...

1. The more direct hours of labor the more money needed to spend. So when there is an increase in direct hours there is an increase in overhead cost. Think about it paying people to work three hours versus two hours cost more money... it is the same thing with overhead and direct cost.

2. John needs to listen to his supervisor but also inform his supervisor's manager about what is going on. John still needs to work and conduct himself each day as if the situation never happened. John needs to make sure he still acts with integrity and good work ethic. Making sure he is doing what he needs to as an employee is just as important as reporting an unethical incident.

3. Honestly what I would do is before I start my work day go to my supervisors boss and tell him I need to talk to him as soon as he is available. Then I would go about my work day as usual and act like nothing happened. It is also important that you as an employee do not gossip about the unethical situation to others. What is going on is no one's business but the people that absolutely must know.

Question 2

There are many factors that influence the development of international accounting in our global marketplace. Plus there are many dimensions to international accounting. Conduct research to locate an article that discusses the development of international accounting standards. Prepare a brief summary of the article and indicate why you feel this is an important issue. Also include the URL of the article.

Respond to this... The international accounting standards (IAS) were an older set of standards stating how particular types of transactions and other events should be reflected in financial statements. In the past, international accounting standards were issued by the Board of the International Accounting Standards Committee (IASC); since 2001, the new set of standards has been known as the international financial reporting standards (IFRS) and has been issued by the International Accounting Standards Board (IASB). Although IASC has no authority to require compliance with its accounting standards, many countries require the financial statements of publicly-traded companies to be prepared in accordance with IAS.

The concept of converging accounting standards started in the 1950s with post-World War II economic integration and related increases in cross-border capital flows. Initial attempts to converge focused on harmonization, or reducing differences among the accounting principles used in major capital markets throughout the world. By the 1990s, harmonization was replaced with convergence - the development of a unified set of high-quality, international accounting standards used in all major capital markets and elsewhere.

I feel that this is an important issue because it ensures effective regulation of financial markets. Capital markets that are located in different areas can create the most efficient capital flows by having these standards in place.

https://www.investopedia.com/terms/i/ias.asp#ixzz4UrpBChqM

Question 3

An organization's strategies are the goal-directed decisions and actions in which its capabilities and resources are connected with environmental opportunities and threats. Strategic management is a process of analyzing the current situation, developing appropriate strategies, putting those strategies into action, and evaluating, modifying, or changing those strategies as needed.

With this in mind and after conducting research, describe a specific experience or situation involving the strategic management process as it pertains to a company and/or person of your choice. Also discuss the issues and factors that influenced and affected this same situation.

Respond to this... When strategic management is utilized in an organization, based on type and size, the level of performance and implementing appropriate strategies is key to their survival. Even though an organization may have various divisions, departments, and work activities the need for a coordinated effort and focus is what is designed by upper management. Their direction needs to be goal-directed and actionable to align its capabilities and resources for the organization to take advantage of internal opportunities and reduce threats in their external environment.

Strategic Management is a process of analyzing the current situation, developing appropriate strategies, putting those strategies into action, and evaluating and changing those strategies as needed. We call these activity situation analysis, strategy formulation, strategy implementation, and strategy evaluation. (Coulter, 2013) Strategic Management is the management of an organization's resources to achieve its goals and objectives. (Investopedia, 2017)

A specific experience that involved strategic management processes for a company that I worked for changed ownership from a father to a son who had different views on how the company ran and where they were headed. The father was determined to keep the strategies that he implemented but was not willing to change with time. When the son took over, the views, direction, and technology implementations really help the company grow by allowing such outside factors to influence what opportunities were available.

Coulter, Mary (2013), Strategic Management in Action, page 2, retrieved from: https://ambassadored.vitalsource.com/#/books/9781323123874/cfi/6/16!/4/2/6/2/2/2/2@0:0

Investopedia (2017), Strategic Management, retrieved from: https://www.investopedia.com/terms/s/strategic-management.asp