Reference no: EM13500051

Accounting: Timing & Mechanics

Trisha Parish

Unit 2 DB

            One of the perks of being the division manager of a large company is the $25,000 bonus that I receive if the division meets its target of $1.5 million by the end of the year.  A shipment of supplies worth $150,000, which was ordered on the 15th of November in anticipation of a seasonal rush, was delivered on the 30th of November.  It is a given that these supplies are need and most of the supplies will be use by the end of the year.  The recording of this expense however, will not help the division reach its target; the division will still be $.5 million short of the target.  As division manager I need to decide on whether to include the expense or not.

            Even though, I would not receive my bonus of $25,000 I would do the ethical thing and report the expense of the supplies.  As a division manager it is important to remain ethical and professional at all times.  According to RushworthKidder,President of the Institute for Global Ethic (2009), "Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong."  Using ethics in decision making we need to apply values, such as honesty, fairness, responsibility, respect, and compassion to our decisions (Kidder, 2009).  Therefore, not reporting an expense as it occurs would be an unethical behavior; it would be a display of un-honesty among other things.  The act of omitting information on a financial statement is considered knowingly misrepresentation of the preparation of a financial statement.  This is action is against an accountants code of ethics.

            Another reason that I would not falsify a financial statement is that altering the books can lead to more deceit later on. Sure it would be nice to wait until January of the next year to place the expense of the supplies that arrived in November, so that the next year's financial statement would take of better.  However, how would I explain the use of supplies that are not even there, or the need to reorder an abundance of supplies in the middle or end of January, when supposedly we just received supplies at the beginning of the months. One little lie could lead to a multiple amount of lies in no time.  Clearly, I see the act of falsifying information as a total disaster.  Besides the lies and deceit, I would ruin my name as a reliable employer, which is something that I am willing to do. 

            I would take the fact that I missed the bonus this year as a lesson to be learned.  Next year I would definitely need to be more on top of things. I will need to plan ahead and look for ways to make the company more productive, which in turn making more likely to achieve next year's target sales.  Life is about making the right choices and striving for a better future, life is about learning.

References

AIU Online. (2012). ACCT 311: Unit 2: Accounting: Timing & Mechanics [Multimedia presentation]. Retrieved from AIU Online Virtual Campus. Principles of Financial Accounting: ACCT311-1201A:01 website.

Kidder, R. (2009).Ethics in Accounting. Retrieved from https://www.articlesbase.com/ethics-articles/ethics-in-accounting-1276428.html