Identify and evaluate the ethical principles

Assignment Help Accounting Basics

Reference no: EM132986486

Case Study

As a result of the modernisation efforts of Azman Wong Bhd a company in the manufacturing sector (henceforth referred to as "the Company"), the directors are of the view that the Company requires a further significant injection of working capital since the Company has committed itself to producing and supplying future orders of goods of an international quality.

The current lending policies of the Company's banker requires borrowers to demonstrate a good stream of projected future cash flows, as well as a level of profitability which would indicate that repayments would be made in a timely manner. However, the current projected future cash flows of the Company would not satisfy the bank's criteria for lending. Meanwhile, the Directors of the Company informed the bank:

"Our company is in an excellent financial position. Our latest cash flow projections and financial results will meet your criteria for lending. Our Chief Accountant, Mr. Ariff will forward the necessary supporting documents to show you our current financial position."

Mr. Ariff, the Chief Accountant joined the Company recently and has openly stated that he cannot afford to lose this job due to his current high level of personal commitments. Meanwhile, the directors are actively involved in managing the level of profits of the Company as they have vested interests to do so. Furthermore, they feel strongly that such efforts on their part would not pose any conflict of interest with the public interest and accounting ethics. They are of the view that ethical behaviour and codes of ethics are irrelevant and are not important in managing the Company as compared to managing their profits.

Question:Identify and evaluate the ethical principles which would guide how a professional accountant should act in this type of situation.

Claim:

Explanation of the dilemma faced by the Accountant (5%), related ethical principles (5%), and suggest steps or actions that can be taken by the accountant (10%).

Please tell me which guidelines are violated and give suggestions!

Reference no: EM132986486

Questions Cloud

Change management plan : Describes ways in which the system was designed to support a positive user experience. Outlines how the system changes will be communicated to the users.

Knowledge of digital evidence volatility : Your individual project for this unit has you researching and applying your knowledge of digital evidence volatility, and the order of volatility.

Crostini mince system : Consider the security policies that will be required for Crostini's Mince system.

Implemented in corporate environment : Discussing the key aspects of how User and Group Schemas are implemented in a corporate environment.

Identify and evaluate the ethical principles : Identify and evaluate the ethical principles which would guide how a professional accountant should act in this type of situation.

What is compensation expense for 2021 : What is compensation expense for 2021 - Make the journal entry to record the exercise of the stock options in 2024

Perform a large number of simulations using the function : Perform a large number of simulations using the function in step 2, and return the values of n, ?1, and ?2, as well as the lowest RMSE.

Evaluate theoretical perspectives on strategic management : Evaluate theoretical perspectives on strategic management and their implications and Critique the limitations of frequently cited theoretical explanations

Compute the future value : Compute the future value of $5,000 compounded annually for 10 years at 5 percent.

User Account

All Pages