Question

Background:  Particular attention has been placed on ethics in accounting in recent years. Improper accounting methods, fraud, and other misdeeds have surfaced, adversely impacting the reputation of the accounting industry. This exercise illustrates improper accounting decisions can lead to investigated cases of purposeful fraud.

Scenario 3

1. You saw your boss take money from the petty cash fund so that she can take you to lunch. Should you automatically assume that your boss will report that withdrawal properly? Why or why not?
2. The office copier needs a few minor repairs and the supply cupboard is getting low. There isn’t enough money in the budget to cover the repair expense and to buy all needed supplies. You know you can take money from one area of the budget to pay for something in another area because you did it a month ago with your supervisor’s knowledge. Shouldn’t it be okay to do it again? Why or why not?
3. Your organization uses inventory figures for tax purposes once a year. However, inventory records are poorly maintained at your organization. Until the system can be perfected, the company owner requires that a physical inventory be taken every month. You notice during this month’s inventory that several boxes of components were improperly inventoried. Is it really necessary to say anything since your organization will be taking another inventory in just a few weeks anyway? Why or why not? Because inventory figures are used only once a year to determination tax on inventory, why is it so critical to maintain accurate figures as long as there is enough material to cover production requirements?
4. Do the three scenarios represent cases in which ethics in accounting might be more important at some times than at others?
5. How might you personally react and what factors guide your reactions in each of the three scenarios?   

Answer 1

1.In the First Scenario we should not Assume that the boss will report the withdrawal Properly ,Instead if we are managing the accounts it is Good to cross Check whether the information is Conveyed Properly or not .

2. It is not at all okk to withdraw the money without the Supervisor Knowledge or Until and unless we are not give the Authority to do so .Earlier it was done within the Knowledge of the supervisor and doing it one time does not give you the Authority to do it again even without the knowlege of the Supervisor . In the particular Company k their are  particular Responsibilities and Authorities we are given ,going beyong that without the Supervisor knowledge is not Good.

3. it will be Unethical if you dont complain about the inaccuracy being performed in the Inventory Figures  ,it is Critical even if the production requirements are met because it will not be useful in the long run and Secondly if proper records are not made it can Variate the Figure or amount of the Tax which can account for the penalty of the orgainsation also

4. yes ,three scenarios represent cases in which ethics in accounting might be more important at some times than at others because ethics are important part of the business ,as employees morale will be boosted if companies practice Ethical Practices they will get the inspiration to do same and Directly or Indorectly it will Increase the Productivity

5. I would have reacted in the Positive manner and would have reported where the unethical practices are done,and our part is to do the work with Honesty and Integrity and rest good result will Follow