Dilehmas In The Accounting Profession Essay Example

the issue. All of these factors impact the stakeholders involved, with the bank holding the operating loan being the first stakeholder to consider.

In order to validate the reliability of their investment, an audit was requested by Models Inc. Suppliers, another important stakeholder, rely on the financial information provided to decide whether to continue extending credit to the company and if they will be paid for goods and services already provided. Additionally, the clients themselves are stakeholders who will be impacted by the decision made regarding any discrepancies discovered in the audit. The resolution of these issues could determine the fate of the company and the job security of its employees.

The decision has implications for various stakeholders, including the accounting firm. Acting ethically can lead to a decrease in current and future revenue, which can affect employees and their potential earnings. Jane is also personally affected as a stakeholder by this decision. She must consider her morals, reputation, and possible future earnings. When making her decision, Jane should assess different approaches and thoroughly analyze how each will affect stakeholders. It is important to prioritize stakeholders and carefully evaluate the impacts on each before reaching a final decision.

Informing her superiors about her uneasiness in signing off on the current audit is crucial for Jane. Approving false information would not benefit any key stakeholders, and although this decision may jeopardize her job, it also safeguards her own interests as well as those of the bank and suppliers. However, Jane must proceed cautiously due to the expectation of confidentiality. It should be noted that reporting this issue to relevant parties in the US

would violate confidentiality.

Chartered accountants and auditors in Canada are accountable for reporting issues to authorities. Both consequentialism and the Pastin approach can be used to analyze this case study, as they emphasize stakeholders' impact and the duty of auditors. The five-question approach is also applicable, particularly when assessing the legality of the decision. In this situation, misrepresenting financial statements is unlawful, therefore requiring reporting.

While there are opposing viewpoints stating that reporting the misrepresentation may negatively impact some stakeholders, these arguments are overshadowed by the prevailing laws. The consequences for stakeholders will differ greatly. To safeguard against possible future default, the bank will likely require loan repayment if the company's profits continue to decline. Similarly, suppliers may choose cash on delivery instead of granting additional credit for their products.

Implementing this strategy can help Models Inc. avoid future losses from uncollectable accounts and improve their accounts receivables turnover, but it could have detrimental consequences. The company may struggle to repay the loan and potentially cease to exist, facing fines and penalties imposed by the governing body. Furthermore, if the company goes bankrupt or shuts down, employees would suffer job losses, negatively impacting the local economy and community.

Viccio and Martin may experience several outcomes, such as losing their highest paying client, facing financial repercussions in the present and future, dealing with government sanctions, and having a tarnished industry reputation. Conversely, Jane might endure immediate unemployment but can preserve her integrity and pursue new job opportunities without feeling guilty. This situation presents numerous viewpoints and factors that must be taken into account.

Both Mr. Viccio and Mr. Small did not

uphold integrity and honesty when they permitted Mrs. Hyst to use poor inventory management as an excuse for concealing the discrepancy. The adoption of diverse philosophical approaches will yield varying outcomes for all involved parties. In light of Canadian laws and regulations, making this decision, despite its numerous adverse impacts, is the correct course of action. Jane could not permit Viccio and Martin to disregard blatant misrepresentation of earnings and holdings while preserving her own integrity and that of her profession.