Discuss role of ethics in reporting accounting

Reference no: EM133163947 , Length: word count:800

Assignment - Ethical Decisions in Accounting

Learning outcome 1: Discuss the role of ethics in reporting accounting information on financial statements.

Scenario

Paige Carter is the controller for a public organization in Nashville, TN. She has just completed a meeting with the organization's CFO, Tommy Rich. Tommy Rich tried to convince Paige to classify some inventory items as fixed assets in an attempt to depreciate more assets for the upcoming accounting reporting period. Tommy Rich's proposal would depreciate more assets by misclassifying inventory as fixed assets in an attempt to reduce net income. Paige knows it is her responsibility to ensure that all items on the organization's financial statements are recorded properly as required by the Financial Accounting Standards Board (FASB) and the AICPA Code of Professional Conduct. She has a great deal of pressure to reduce net income to reduce corporate income taxes and qualify for a company bonus. She does not want to disappoint the CFO, and her job may be at stake.

What would you do in this case? Why?

What is Paige's obligation to the organization and the AICPA professional rules of conduct and reporting requirements?

What are the differences between inventory and fixed assets? Are the characteristics the same? Why or why not?

What would motivate you to speak up? What would cause you to stay silent? Would it make a difference if this was only a one-time request from the CFO?

Instructions
Complete the ACC206 Ethical Decisions in Accounting Template [PPTX] and address each requirement as instructed below:

Slide 1: The title "Paige Carter and the CFO" has already been provided for you. Add the date, course name and number, date of submission, and professor's name to this slide.
Title page should look professional.

Slide 2: Summarize the scenario for the CFO. Do not copy and paste the information in the scenario. Explain the scenario in your own words.
Provide all details including the nature of the request to Paige Carter, your obligations to the organization and the accounting profession, and your predictable outcome if the request from Tommy Rich is honored.
Summary should include authoritative language (FASB, SEC, AICPA, etc.).

Slide 3: Outline at least three advantages of accurate reporting and why inventory should or should not be classified as a fixed asset.
Make sure you briefly define what the advantages are in your outline.
Outline should include authoritative language (FASB, SEC, AICPA, etc.).

Slide 4: Outline at least three disadvantages of accurate reporting and why inventory should or should not be classified as a fixed asset.
Make sure you briefly define what the disadvantages are in your outline
Outline should include authoritative language (FASB, SEC, AICPA, etc.).

Slide 5: List at least three of the major differences between inventory and fixed assets.
Compare and contrast attributes or characteristics of fixed assets and inventory.
Provide at least two types of inventory and fixed assets.

Slide 6: Describe the primary ways in which both classifications would affect the future of the business and why we should classify inventory and fixed assets in the same account or separate accounts.
Include how inventory and fixed assets would affect income or an overstatement of assets within financial statements.
Defend your position using authoritative language to support your decision on classifying fixed assets or inventory in the same account or separate accounts.

Slide 7: Recommend which option should be pursued. Justify your reporting decision.
Provide a definitive answer regarding whether you would classify inventory items in the inventory account, or if you would classify inventory as a fixed asset.

Slide 8: Sources. Use at least three quality sources to support your writing.
Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.

Reference no: EM133163947

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