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Ethical Considerations in Accounting Essay

Ethical Considerations in Accounting Essay.

Ethical Considerations in Accounting Essay

                                                 Category: Others

EC5: Tiffany Lyons was just hired as the assistant treasurer of Key West Stores, a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Tiffany will manage. Her primary responsibility is to maintain the company’s high credit rating by paying all bills when due and to take advantage of all cash discounts.

Jay Barnes, the former assistant treasurer who has been promoted to treasurer, is training Tiffany in her new duties. He instructs Tiffany that she is to continue the practice of preparing all checks “net of discount” and dating the checks for the last day of the discount period. “But,” Jay continues, “we always hold the checks at least 4 days beyond the discount period before mailing them. That way, we get another four days of interest on our money. Most of our creditors need our business and don’t complain. And, if they scream about missing the discount period, we blame it on the mailroom or the post office. We’ve only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!”

Assignment Instructions

You are to write a 2page paper. Use the ethics resources for accounting. Make sure to cite at least one source from those provided and reference them (in your separate reference page) following APA guidelines. https://www.aicpa.org/research/standards/codeofconduct.html

Respond thoroughly to the following questions in your reflective essay:

  • What are the ethical considerations in this case?
  • Who are the stakeholders that are harmed or benefited in this situation?
  • Should Tiffany continue the practice started by Jay? Does she have any choice?
  • Which Code of Conduct principle would you act on from the professional codes of conduct guiding ethical behavior in this field (Provide the name of the organization, and the code of conduct that pertains to why you act, and then provide the URL for your source)?
  • Based on your chosen code of conduct principle(s), what would you do (step-by-step) in order to act in accordance with your chosen principle to address this situation?

Requirements: 2 pages   

Ethical Considerations in Accounting

Student’s Name

Professor

Institution

Date

Ethical Considerations in Key West Stores

Ethical issues include conflicts of interest, such as when Key West Stores’ management expects to make a lot of money from the endeavor and thus delays the checks by four days (Weygandt et al., 2018). Their motivation is purely selfish: they want to increase the company’s profits by whatever means necessary. There have also been times when the company has reaped the benefits of illegal activities. There’s evidence that the treasurer has to keep checks on hand for longer before delivering them to the appropriate recipients. Thus, more time and better bargains on illegal operations may be purchased by the company. The company’s primary goal is to increase profits at the expense of the needs of the people who work there. (Pg. 34)

Which parties stand to lose or gain from this situation?

Key West Stores’ earnings benefit the company’s owners and its workers since they are reinvested in the company. The management team does, however, have considerable influence over the checks since they run the company (Weygandt et al., 2018). The backstops with the management of an organization if things are either going well or poorly. Furthermore, they built the frameworks that allow them to profit from immoral behavior. Because of this, even if it goes against the letter of accounting rules and regulations, they nevertheless end up with a healthy profit margin. Customers who have yet to receive payment include stockholders who risk financial damage if their dues are unpaid in the allotted timeframe. Weakness in resources prevents them from accomplishing business objectives caused by this conduct.

Should Tiffany Carry on the Unethical Behavior? Are there any other options for her?

The way a Key West store is currently operating is unethical, and she must stop immediately. If the company is exposed, she is more likely to suffer due to the latter’s failure to make timely payments (Weygandt et al., 2018). It’s also illegal since it’s against both the law and accounting rules. The act prevents her from paying customer checks on time; therefore, she must eliminate the tradition. The most efficient way to change this behavior is to advocate for developing and implementing policies that emphasize ethical behaviors and customer values. Through policies, the organization can, in the long run, establish a positive culture.

Code of Conduct Principle from the Professional Code of Conduct

Integrity is an essential part of every company’s code of conduct. Being actively engaged in illegal operations means the company lacks integrity, which leads to recording profits that the organization did not obtain via legal means. The company’s transactions aren’t always straightforward. To make sure this happens, the AICPA must do so through continuous monitoring of organizational conduct.  Customers will always feel betrayed by organisations that don’t have integrity in the process of conducting business. https://smallbusiness.chron.com/ethics-accounting-profession-3738.html

What would you do?

Many managers disregard ethical practices simply because of a lack of knowledge of their existence or lack of understanding of the possible repercussions. First, I’d teach the company’s upper management about the code of conduct, and then I’d tell the employees how important it is to obey the rules (Weygandt et al., 2018). If not interested, I could still recommend them for external professional training, which is taken positively by top management in most cases. Making the management aware of the possible repercussions of their conduct might play a significant part in swaying the management team to make the changes. If this is handled internationally, the organization may lose its operating permits and be punished. That’s why I’ll let them know about the potential repercussions. And I will teach the company management how important it is to behave ethically and following the applicable financial reporting regulations. This will provide the firm a way to reap the rewards of doing the right thing and, as a result, conduct fair business.

References

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2018). Accounting principles (13th ed.). Hoboken, NJ: Wiley.

AICPA Code of Professional Conduct (pg. 33, 34)

                                                 Category: Others

EC5: Tiffany Lyons was just hired as the assistant treasurer of Key West Stores, a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Tiffany will manage. Her primary responsibility is to maintain the company’s high credit rating by paying all bills when due and to take advantage of all cash discounts.

Jay Barnes, the former assistant treasurer who has been promoted to treasurer, is training Tiffany in her new duties. He instructs Tiffany that she is to continue the practice of preparing all checks “net of discount” and dating the checks for the last day of the discount period. “But,” Jay continues, “we always hold the checks at least 4 days beyond the discount period before mailing them. That way, we get another four days of interest on our money. Most of our creditors need our business and don’t complain. And, if they scream about missing the discount period, we blame it on the mailroom or the post office. We’ve only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!”

Assignment Instructions

You are to write a 2page paper. Use the ethics resources for accounting. Make sure to cite at least one source from those provided and reference them (in your separate reference page) following APA guidelines. https://www.aicpa.org/research/standards/codeofconduct.html

Respond thoroughly to the following questions in your reflective essay:

  • What are the ethical considerations in this case?
  • Who are the stakeholders that are harmed or benefited in this situation?
  • Should Tiffany continue the practice started by Jay? Does she have any choice?
  • Which Code of Conduct principle would you act on from the professional codes of conduct guiding ethical behavior in this field (Provide the name of the organization, and the code of conduct that pertains to why you act, and then provide the URL for your source)?
  • Based on your chosen code of conduct principle(s), what would you do (step-by-step) in order to act in accordance with your chosen principle to address this situation?

Requirements: 2 pages   

Ethical Considerations in Accounting

Student’s Name

Professor

Institution

Date

Ethical Considerations in Key West Stores

Ethical issues include conflicts of interest, such as when Key West Stores’ management expects to make a lot of money from the endeavor and thus delays the checks by four days (Weygandt et al., 2018). Their motivation is purely selfish: they want to increase the company’s profits by whatever means necessary. There have also been times when the company has reaped the benefits of illegal activities. There’s evidence that the treasurer has to keep checks on hand for longer before delivering them to the appropriate recipients. Thus, more time and better bargains on illegal operations may be purchased by the company. The company’s primary goal is to increase profits at the expense of the needs of the people who work there. (Pg. 34)

Which parties stand to lose or gain from this situation?

Key West Stores’ earnings benefit the company’s owners and its workers since they are reinvested in the company. The management team does, however, have considerable influence over the checks since they run the company (Weygandt et al., 2018). The backstops with the management of an organization if things are either going well or poorly. Furthermore, they built the frameworks that allow them to profit from immoral behavior. Because of this, even if it goes against the letter of accounting rules and regulations, they nevertheless end up with a healthy profit margin. Customers who have yet to receive payment include stockholders who risk financial damage if their dues are unpaid in the allotted timeframe. Weakness in resources prevents them from accomplishing business objectives caused by this conduct.

Should Tiffany Carry on the Unethical Behavior? Are there any other options for her?

The way a Key West store is currently operating is unethical, and she must stop immediately. If the company is exposed, she is more likely to suffer due to the latter’s failure to make timely payments (Weygandt et al., 2018). It’s also illegal since it’s against both the law and accounting rules. The act prevents her from paying customer checks on time; therefore, she must eliminate the tradition. The most efficient way to change this behavior is to advocate for developing and implementing policies that emphasize ethical behaviors and customer values. Through policies, the organization can, in the long run, establish a positive culture.

Code of Conduct Principle from the Professional Code of Conduct

Integrity is an essential part of every company’s code of conduct. Being actively engaged in illegal operations means the company lacks integrity, which leads to recording profits that the organization did not obtain via legal means. The company’s transactions aren’t always straightforward. To make sure this happens, the AICPA must do so through continuous monitoring of organizational conduct.  Customers will always feel betrayed by organisations that don’t have integrity in the process of conducting business. https://smallbusiness.chron.com/ethics-accounting-profession-3738.html

What would you do?

Many managers disregard ethical practices simply because of a lack of knowledge of their existence or lack of understanding of the possible repercussions. First, I’d teach the company’s upper management about the code of conduct, and then I’d tell the employees how important it is to obey the rules (Weygandt et al., 2018). If not interested, I could still recommend them for external professional training, which is taken positively by top management in most cases. Making the management aware of the possible repercussions of their conduct might play a significant part in swaying the management team to make the changes. If this is handled internationally, the organization may lose its operating permits and be punished. That’s why I’ll let them know about the potential repercussions. And I will teach the company management how important it is to behave ethically and following the applicable financial reporting regulations. This will provide the firm a way to reap the rewards of doing the right thing and, as a result, conduct fair business.

References

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2018). Accounting principles (13th ed.). Hoboken, NJ: Wiley.

AICPA Code of Professional Conduct (pg. 33, 34)

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