You have been working as a staff accountant at Sanborn Industries for three months. Mr. Jones,...

You have been working as a staff accountant at Sanborn Industries for three months. Mr. Jones, the accounting manager as well as your boss, has informed you that he has decided to change vendors for the company’s office supplies. He notifies you that your company will now be utilizing the store owned by his best friend. Mr. Jones is hopeful that this will bring in a significant profit for his friend’s business possibly preventing the closing of his store. You receive the first invoice from that store and realize that the prices are nearly double the amount that the company was paying when using a large retail chain.

What should you do about the situation?

Expert Solution

As per information of the question, it is clear that Mr. Jones want to use his position to take undue benefits. Mr. Jones want to divert funds from the Sanborn Industries towards his close friend. So, it is clear such busienss practice is unfair & unacceptable.

Hence in such case I (as an accountant) have to do something different which is as follow;

First of all I will bring this matter to my boss (Mr. Jones) because officially he is my boss, although I know that Mr. Jones also want such unfair payment of invoice towards his friend. So I will inform Mr. Jones about this wrongdoing, if Mr. Jones ignore this then I will inform other position in the top management such as (CFO or Controller) and also explain the impact of such wrongdoing on the financial statements of the firm, impact on the internal & external users with strong proofs.

So CFO or controller will see my point with proper proofs then they may be interested in taking required actions against such wrongdoing.

If CFO or Controller also ignore this matter then I will contact to Counselor of IMA ethics, explaining whole matter in detail then hopefully it will finished my duty in the most welfare of the firm.

Thus, as an accountant I will raise this matter to the top management or to other official through proper acceptable channels.

ekkarill92 answered 1 year ago

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