Tamira had several alternative options instead of hiding the expense accrual estimates from the President. Initially, she could have informed the President about the insufficient time to prepare reliable financial statements before the bank meeting, which could affect the bank's decision about financing Picton.
She could have included footnotes for each adjusting entry to notify both the President and the bank of potential inaccuracies in the financial statements. Moreover, she could have informed the President about the need for additional time to ensure accurate financial statements and suggested rescheduling the meeting. Tamira's role as Picton's accountant is to diligently complete the accounting cycle and prepare truthful and reliable financial statements for third-party decision-making. Personally, I would not have reacted similarly. Firstly, a twenty-four-hour timeframe is inadequate to finalize a year's worth of adjusting entries and
...prepare financial statements that the bank heavily relies on for a significant financing decision. Most importantly, the accounting field demands integrity and honesty.
Tamira lacked honesty when informing the President about her method of preparing the financial statements. From my perspective, this action was highly unethical because she manipulated the company's expenses in a manner that could have portrayed an inaccurate financial position for Picton. If I were in Tamira's position, my first course of action would be to communicate with the President and explain that accomplishing his request within 24 hours would be impossible. Subsequently, I would discuss various alternatives with him, which include:
- Rescheduling the bank meeting and indicating that additional time is necessary to accurately prepare the financial statements, in order to offer a truthful representation of Picton's financial condition.
Engaging in a conversation about the possibility of estimating expense accruals and providing explanatory footnotes for these estimates. Regardless of the chosen approach, my initial step would encompass candidly and openly discussing with the President the challenges associated with meeting such a deadline and the potential for significant distortions in the financial statements resulting from utilizing estimates.
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