Ethical Dilemma in Accounting
3. A). Ethical dilemma I now face: * Return the dividend checks all 4 owners received to help with putting money back in the company. * Hire an independent firm to reconcile the financial statements. * Invest in an external auditor. * Disclose the wrongdoing. * Ensure all parties involve or have a stake in the financial statements are notified of the changes. B). No, because the ticket sales revenue is for the following year and the service has not been provided to the fans. C). No, because the company didn’t maintain the agreement that was set forth. The company is assuming that advertisers will be sympathetic and pay any way. D). Yes, the false information can have a devastating effect on the company. You have to consider how the decisions will affect others, violation of the GAAP principles, and a realistic appraisal of the possible consequences of the decision. E). The bank has an outside interest and should have accurate and reliable information. Therefore, the bank should be notified of the changes.
4. A). Who will benefit or be harmed * Internal users will benefit – Executives and/or owners, Management * External users will be harmed – Decision maker (management), Stockholder, Bankers, Employees, and Suppliers. B). How are they likely to benefit or be harmed? * Internal user benefit * Executives - benefits by way of putting confidence in investors to invest into the company. * Management – May lead to promotions and a pay raise. * Internal user harmed * Decision maker (management) will as be harmed by false information if not disclose to decision maker. Unable to make the proper decision on budgeting the funds or resources. * Executives – The Company may bankrupt from bad decisions thus executives losing investment and reputation tarnish. * External users will be harmed * Stockholders – False sense of confidence to hold on to shares or invest into
4. A). Who will benefit or be harmed * Internal users will benefit – Executives and/or owners, Management * External users will be harmed – Decision maker (management), Stockholder, Bankers, Employees, and Suppliers. B). How are they likely to benefit or be harmed? * Internal user benefit * Executives - benefits by way of putting confidence in investors to invest into the company. * Management – May lead to promotions and a pay raise. * Internal user harmed * Decision maker (management) will as be harmed by false information if not disclose to decision maker. Unable to make the proper decision on budgeting the funds or resources. * Executives – The Company may bankrupt from bad decisions thus executives losing investment and reputation tarnish. * External users will be harmed * Stockholders – False sense of confidence to hold on to shares or invest into