Reference no: EM133157478

Question - A trainee accountant Sasha Clarke is responsible for preparing the first draft of the financial statements of the company she works for. She has received the following email from the finance director:

'It's very important that the upcoming set of financial results shows a favourable financial performance and position. If the results are good then potentially there are big bonuses available for all staff, including you! I know that many of the numbers in financial reports are based on estimates. When you are preparing the financial statements I want you to choose estimates that will produce the maximum acceptable reported profit. I hope you will comply with my request. I will be carrying out your annual staff appraisal shortly and this will certainly be a factor in the grading I give you'.

Sasha Clarke is concerned about this request and has approached a friend, Zara Mitchell, who is also a trainee accountant, for advice. Zara Mitchell works for another company.

Required - Identify the ethical issues/threats that Sasha Clarke might face in this situation and what should she do.