Question

Case study

Fatima Hassan is responsible for the collection, and auditing services of clients' accounts for the Doha Audit Office. Has been commissioned With a new client, Al Wajba Consulting Services Company, which contracted with the Doha Audit Office recently. Company CEO It is Mr. Ali Mahmoud, who monitors all operating activities of the company and takes all major decisions. Never use this company Previously, any services from the audit office. In addition to preparing the financial statements, the Doha Audit Office will handle the related matters Company taxes.

On her first visit to the company, Fatima Hassan met Hala Abdullah, she was recently hired as an accountant and is still a student. Accounting last year at a local university. At a later meeting, Hala assured Fatma that she had found the job at the beginning of the class Scholastic after extensive research. She needs money to help fund her studies at university and feels lucky to have found A well-paid job during this current phase of the economic downturn due to the COVID-19 pandemic.

Hala felt that Fatima was someone she could talk to and get advice from. Hala spoke of a situation she had in mind Some time ago. Hala concerns dealing with sales revenue. When the proceeds from sales are collected and deposited on a weekly basis, the necessary report is filled out with the most accurate categories of payment: cash, checks or credit cards. Distance Depositing the total amount on a weekly basis, Mr. Ali Mahmoud prepares a report after adjusting the total amount deposited by His own vision. After looking at some of the weekly deposits, Hala noticed that 20,000 Qatari cash were missing from each Deposit process.

After a more comprehensive examination of the monthly tax documents that Mr. Ali filled out, Hala notes that the total income is the monthly amount reported to the Tax Authority is QR 80,000 less than the amount actually calculated. Professor Ali He is the only person to deal with the funds after they have been pooled. It is also the only person who deposits money on a weekly basis. When Hala asked Mr. Ali about the non-reporting of these unreported revenues, Mr. Ali replied that it was being done for tax purposes. It is believed that the auditor will accept this procedure because the fees of the Doha Audit Office are to implement Audit tasks and other tax services are paid by Al Wajba Consulting Services.

Study requirements:

Each student must answer the following questions but each question should be answered at least 120 word for each question:

1. What is the problem or ethical problems in this situation? And why is each of them an ethical problem?

2. Who are the affected stakeholders in this situation? Explain how.

3. What are the alternatives available to Hala Abdullah, Fatima Hassan, and Professor Ali Mahmoud?

4. For each alternative dealt with in Requirement (3), are the net benefits exceeding the net losses for all the owners? Discuss your interpretation clearly

Answer 1

1) Here,the ethical problem is managment presuure on hala abdullah, when hala abdullah asked mr ali about non reporting of unreported revenues, he said it was being done for tax purposes which is ethically not right and should not be accepted by fatima hassan. And also. in doha audit office, because of management they have to accept unethical behaviour to deal with the professionals of different coorporations.

Managment of all operating activities and reponsibilities lies in hand of mr. ali mahmoud who takes unethical decision of non reporting of unreported revenus and also preparing reports after adjusting the total amount deposited by his own vision.

2). Net income and profits of al waiba consulting services increased the stakeholder's security holding in that corporation.Hala notes that the total income is the monthly amount reported to the Tax Authority is QR 80,000 less than the amount actually calculated, because of this net income of corporation decreases in income statement which indirectly stakeholder wealth.

3) The alternatives available to Hala Abdullah, Fatima Hassan, and Professor Ali Mahmoud are :

Professor Ali Mahmoud : He should keep his staff informed and provide training classes to employess about ethical business codes. decision making should be in hands of uper level only. Mr. Ali should take decisions in favour of stakeholders and coorporation which are ethical by nature.

Fatima Hassan: audit and account professional should imply all code of conducts with tranperancy and should not take decisions in favour of his own benifits which in future place negative mark on audit firm.

Hala Abdullah : Because of money need for her studies hala accepts unethical decision due to COVID 19. And also, she shouln't be personal with fatima because she is the one who is representing her company with audit professionals.

4) net benefits exceeds the net loss of all the owners. these types of alternatives are found in socual welfare and public interest.