Evaluating the Ethical Dilemma

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August 15, 2017
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Evaluating the Ethical Dilemma

Evaluating the Ethical Dilemma Question 1.violation the Revenue principle Accounting to the accrual basis principle that works under the General Accepted Accounting Principle, which clearly states that revenues are not realized or realizable at the point of sale of the goods, but revenue is only accepted when the goods have been paid for and the customer has received the full custody of the goods. The revenues presented recorded for in this case are not the correct figures as they have been inflated, their value has been increased to cater for personal interests. This is wrong g due to the fact, in any accounting records ethical issues must be observed and in Symbol case their is no accountability ,transparency and even honesty in recording of any transactions that are meant to meet the public demands. Question 2.Accounting for bad debts This is mainly determined by the approach the business takes in accounting for the Revenues, for instance if the Symbol was accounting for the bad debts using the cash basis that would mean that business accounts for the revenues after receiving the incomes. In this scenario, since the Symbol has anticipated an encounter with some bad debts, So that the accounts could portray transparency and embrace ethics he will be compelled to open two complementary accounts. One is the Revenue account in which the expected amount is to be recorded against the bad debts accounts and in this way the debts are presumed to have been written off. A reserve for bad debts accounts should always be there which creates allowance for such anticipatory issues. Question 3.factors that led to falsification of the documents Financial constraints may be one of the factors that may have compelled the management to falsify the documents. The business may realize that it is operating under a loss and in order to remain in the market falsifying the documents could be the only way possible. If Symbol business was having a bad reputation on its operations the management may opt to falsify the documents in order to have customers’ loyalty. Also the management could do this for their personal gains and this depicted from the fact that Mr.Asti got rich from this fraudulent behavior. In order to conceal this unethical behavior and avoid audit trials that would reveal the dilemma the symbols’ the management would always report on the success of the business and this would not raise any insinuation to the relevant authority. Question 4.Those Hurt by the Managements Unethical Behavior Mostly the resellers of the Symbols company are the ones who were mostly hurt by the managements un- ethical behavior as they would have made great sales if could operates directly with the distributor without passing through the Symbol. This would also mean that their reputation could be compromised by the public. Alongside the resellers, the final consumers were also hurt by the unaccepted code of conduct of the managers as no one would like to be associated with any unethical issue as this may degrade ones status in the society. Question 5 As an auditor of the firm, in carrying the auditing trails to a Symbols firm I would have a cross check on the transactions concerning the account the revenues receivables and transactions which involve revenues payables for this have proven to be the ones having frauds. The channels used in the industry should be understood and simple to follow as stuffy and complicated channels may have other hidden agendas which will accelerate the problem. The ratio of handing such channels should be well explicated and be handled by one or several people who should be answerable in case anything arises regarding the channels.

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