Discuss what ethical issues are involved

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Ethics in accounting is a hot topic in the business world these days. Corporate Greed, Opportunity, Disconnection, and Ignorance are complex ethical issues. Let's look at an example the Causes of Ethical Lapses in Accounting:

Jennifer VanPelt is the assistant chief accountant at BIT Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter and Jennifer is hurriedly trying to prepare a trial balance so that quarterly financial statements can be prepared and released to management and the regulatory agencies. The total credits on the trial balance exceed the debits by $1,000.

In order to meet the 4 P.M. deadline, Jennifer decides to force the debits and credits into balance by adding the amount of the difference to the Equipment account. She chose Equipment because it is one of the larger account balances; percentage-wise it will be the least misstated. Jennifer plugs the difference! She believes that the difference is quite small and will not affect anyone's decisions. She wishes that she had another few days to find the error but realizes that the financial statements are already late.

Who are the stakeholders in this situation? What ethical issues are involved? What are Jennifer's alternatives?

Reference no: EM131787349

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