1. Identify the ethical issue within the scenario.
You will identify the ethical issue presented in the scenario.Explain in detail why the ethical issue exists and rules thatgovern the handling of the situation. You must use at least twocredible outside source that supports your assertion regarding theethical dilemma.
2. Answer each of the following questions: ï· Who will potentiallybe harmed? ï· Who will potentially benefit? ï· What (ifany) rights or claims will be violated?
In this section of your answer, you need to address thestakeholders involved in the situation. Then, you need to providean explanation of how those stakeholders will be affected. When youdiscuss who might be harmed by the situation, fully explain howthey will be harmed. When you discuss who will potentially benefit,also share in detail how they will benefit. When you discuss theviolation of rights and/or claims, give details about those rightsand/or claims and why the ethical issue will impact those rightsand/or claims.
3. Discuss your responsibility and obligations as an accountingprofessional.
In the concluding paragraph, discuss how the matter should behandled based on your responsibilities and obligations, as well asyour ethical convictions. Describe in detail why you would chooseto deal with the ethical issue in this manner, from the standpointof responsibility as an accounting professional and from an ethicalstandpoint.
For each scenario, you will create a document that answers each ofthe three requirements presented. You should format your documentusing Times New Roman 12 point font with 1â margins on all sides.Please double space your document. You must use correct APAformatting for all citations and include a separate Works Citedpage for each of the ethical scenarios. Any form of plagiarism withresult in a 0 for the entire Capstone Project and you will receivean F as your final grade in the course.
I would suggest separating each of the three requirements into 3different paragraphs. The key to doing well on this section isproviding detail. While you are only required to provide one pageof written material by the assignment instructions, please notethat you will be graded on content and fully answering (in detail)the three numbered requirements.
Scenario #1:
You are employed as an auditor at a CPA firm. One of your clientsis Camp Enterprises, a company who has become quite successful overthe past 4 years. Increases in earnings have averaged around 15%each year. The corporation is planning on a public offering ofstock in January 2016, which in turn would cause a sizeableincrease in fees for your employer. Furthermore, the additionalfinancing would fund an expansion that would bring new jobs for thecommunity, which would help to stimulate the local economy, andallow the company to diversify their products.
On October 31, 2015, as you are working on the audit for the fiscalyear ending June 30, 2015, an issue comes to your attention thatcould potentially have an effect on the significant increase inearnings for the fiscal year. A very large orderwas slated to be shipped FOB Shipping Point to Coral Creations onJuly
14, 2015. The order was completed and stored in the warehouse butwas not segregated. Management included the selling price andrelated expenses in the net income for the fiscal year ending June30, 2015. If the issue is handled in a way thatdecreases net income, Camp Enterprisesâ net income will be lowerthan the amount reported last year.
Scenario #2:
It is July 3, 2015, and you have just been hired on as a staffaccountant at Pace Corporation. You have been tasked on creatingthe financial statements for the 2nd quarter of the fiscal year,and as you create the balance sheet, you notice an account calledMiscellaneous Equipment in the amount of $395,000. This is arelatively large account balance compared to the other fixed assetaccounts, and you are a bit unsure how to classify the account forreporting purposes, since you havenât even found a depreciationschedule for the account.
In order to get more information, you go to the Controller, ScottSmith, and ask about the account. He replies, âThat account needsto be included under Property, Plant & Equipment. Because ourbusiness is cyclical, and we always show higher profits in thethird and fourth quarters of the year, we put all of our equipmentrepair expenses in that account and then expense them off when wehave more revenue to offset it in the last two quarters of theyear. This keeps us from having to show losses in the first andsecond quarters of the year, and makes all of our quarterly reportslook good. It really doesnât matter because our yearly totals areall the same regardless of how we report repair expenses in each ofthe quarters. Weâve done it this way for years, and that is how Iwant you to report it.â
1. Identify the ethical issue within the scenario.
You will identify the ethical issue presented in the scenario.Explain in detail why the ethical issue exists and rules thatgovern the handling of the situation. You must use at least twocredible outside source that supports your assertion regarding theethical dilemma.
2. Answer each of the following questions: ï· Who will potentiallybe harmed? ï· Who will potentially benefit? ï· What (ifany) rights or claims will be violated?
In this section of your answer, you need to address thestakeholders involved in the situation. Then, you need to providean explanation of how those stakeholders will be affected. When youdiscuss who might be harmed by the situation, fully explain howthey will be harmed. When you discuss who will potentially benefit,also share in detail how they will benefit. When you discuss theviolation of rights and/or claims, give details about those rightsand/or claims and why the ethical issue will impact those rightsand/or claims.
3. Discuss your responsibility and obligations as an accountingprofessional.
In the concluding paragraph, discuss how the matter should behandled based on your responsibilities and obligations, as well asyour ethical convictions. Describe in detail why you would chooseto deal with the ethical issue in this manner, from the standpointof responsibility as an accounting professional and from an ethicalstandpoint.
For each scenario, you will create a document that answers each ofthe three requirements presented. You should format your documentusing Times New Roman 12 point font with 1â margins on all sides.Please double space your document. You must use correct APAformatting for all citations and include a separate Works Citedpage for each of the ethical scenarios. Any form of plagiarism withresult in a 0 for the entire Capstone Project and you will receivean F as your final grade in the course.
I would suggest separating each of the three requirements into 3different paragraphs. The key to doing well on this section isproviding detail. While you are only required to provide one pageof written material by the assignment instructions, please notethat you will be graded on content and fully answering (in detail)the three numbered requirements.
Scenario #1:
You are employed as an auditor at a CPA firm. One of your clientsis Camp Enterprises, a company who has become quite successful overthe past 4 years. Increases in earnings have averaged around 15%each year. The corporation is planning on a public offering ofstock in January 2016, which in turn would cause a sizeableincrease in fees for your employer. Furthermore, the additionalfinancing would fund an expansion that would bring new jobs for thecommunity, which would help to stimulate the local economy, andallow the company to diversify their products.
On October 31, 2015, as you are working on the audit for the fiscalyear ending June 30, 2015, an issue comes to your attention thatcould potentially have an effect on the significant increase inearnings for the fiscal year. A very large orderwas slated to be shipped FOB Shipping Point to Coral Creations onJuly
14, 2015. The order was completed and stored in the warehouse butwas not segregated. Management included the selling price andrelated expenses in the net income for the fiscal year ending June30, 2015. If the issue is handled in a way thatdecreases net income, Camp Enterprisesâ net income will be lowerthan the amount reported last year.
Scenario #2:
It is July 3, 2015, and you have just been hired on as a staffaccountant at Pace Corporation. You have been tasked on creatingthe financial statements for the 2nd quarter of the fiscal year,and as you create the balance sheet, you notice an account calledMiscellaneous Equipment in the amount of $395,000. This is arelatively large account balance compared to the other fixed assetaccounts, and you are a bit unsure how to classify the account forreporting purposes, since you havenât even found a depreciationschedule for the account.
In order to get more information, you go to the Controller, ScottSmith, and ask about the account. He replies, âThat account needsto be included under Property, Plant & Equipment. Because ourbusiness is cyclical, and we always show higher profits in thethird and fourth quarters of the year, we put all of our equipmentrepair expenses in that account and then expense them off when wehave more revenue to offset it in the last two quarters of theyear. This keeps us from having to show losses in the first andsecond quarters of the year, and makes all of our quarterly reportslook good. It really doesnât matter because our yearly totals areall the same regardless of how we report repair expenses in each ofthe quarters. Weâve done it this way for years, and that is how Iwant you to report it.â
Related questions
The Problem: The Case of the SickBuilding
This week you received a memo from one of the members of the HumanResources Department. He suspects the aging building which housesyour division is filled with mildew and other agents which causerespiratory distress. These agents are circulated throughout thebuilding and will cause more and more illnesses to occur. Herecommends that this problem be quickly remedied.
While you sympathize with him, the changes heâs suggesting willhave to come from the money the company was holding in reserve forthe next product launch. The company owns the building and thecurrent market value is $2 million. While you have insurance, youalso have a $250,000 deductible. Thus, to âcureâ the alleged âSickBuilding Syndromeâ you will have to spend $250,000 and the balanceof the expense will come from insurance. If you do not fix theproblem, it will continue to worsen.
Further, the Human Resources team has forwarded the following memoto you:
To: Human Resources
From: Marcus Keller
RE: Illness
This memo is to inform the members of the Executive Committee thatI will be taking an extended leave of absence due to my acuterespiratory problems. My doctor informs me that the symptoms andseverity of the problems are likely due to "Sick BuildingSyndrome."
Marcus Keller
Currently, three people are sick. While the health care policyyou provide for employees covers the expenses associated with theillness, your insurance premium is tied to the use of the policy.Thus, if people continue getting ill with a long term illness, thecost of insurance will increase.
Please complete each section of this worksheet. Some peoplefind that writing the answers out on another page and then "cuttingand pasting" them into the worksheet lets you think through theproblem better.
If you only have time to do part of this worksheet, click the "savework" button at the bottom of this page. At any later time, you canthen return to this worksheet and continue.
Be Attentive: Set the Context
1. Ethical Actor
The first step is to identify the ethical actor. In a sentenceidentify the ethical actor for this problem.
2. Stakeholders
The next step is to identify the stakeholders. List the otherstakeholders for this problem.
3. Assumptions
In two or three bullet points, identify any assumptions you aremaking about the problem.
Be Intelligent: Identify the Issue and the Values inTension
1. Issue
In one sentence, identify the issue for this problem.
2. Values in Tension
In three or four bullet points, identify the values intension.
Be Reasonable: Explore the Options
1. Influence Factor
In this first step, list the stakeholder groups that will beinfluenced by the decision. For each group, note the number ofstakeholders in the group. Also note the impact that any decisionwill have on each group. The impact is expressed on a scale from 1to 10.
Note that the sum of all impact numbers should add up to 10, andeach impact number must be greater than zero.
PLEASE NOTE: At least 3 stakeholders must always be defined for theethical dilemmas.
To add a stakeholder group, click the "+" button. To delete astakeholder group, click the "Ã" button next to the row containingthe group you wish to delete. Note that these actions affect alltables on this worksheet.
| Stakeholder | Number in Group | Impact (1-10) | Influence Factor | |
| 012345678910 | ||||
| 012345678910 | ||||
| 012345678910 |
| 10 Remaining | ||||
2. Criteria for Happiness
In this next step, list the criteria for happiness associated withthe stakeholders and the issue at hand.
| Stakeholder | Criteria |
| na | |
| na | |
| na |
3. Units of Happiness
After brainstorming with the leadership team, you haveidentified four options:
Spend the money on the repairs to the building.
Set aside required money to handle the increased premiums due tothe illness of employees.
Do nothing and handle those who become ill through the existinghealth care and short term leave policies.
Buy a new building and sell the other building for the value ofthe land.
Choose three out of the four options to analyze. For eachoption, calculate the units of happiness (utils) for eachstakeholder group. Utils are measured on a scale of 1 to 10.
Select Option... Happiness Utils for Option 1 Happiness Utilsfor Option 2 Happiness Utils for Option 3 Happiness Utils forOption 4
| Stakeholder | Utils | Rationale |
| na | 0 1 2 3 4 5 6 7 8 9 10 | |
| na | 0 1 2 3 4 5 6 7 8 9 10 | |
| na | 0 1 2 3 4 5 6 7 8 9 10 |
4. Greatest Good
Once you have completed your analysis of this ethical dilemma bymeans of the tables above, it is possible to determine the totalweighted units of happiness. In this final step, you can see whichoption truly does produce the greatest good for the greatestnumber.
Be Responsible
1. Choose an Option
Select one option to implement within your Division:
| Spend the money on the repairs to the building. |
| Set aside required money to handle the increased premiums dueto the illness of employees. |
| Do nothing and handle those who become ill through the existinghealth care and short term leave policies. |
| Buy a new building and sell the other building for the value ofthe land. |
2. Explain Your Decision
Using the guidelines for how to write a memo, write a memo to beshared with the rest of the leadership team which explains yourdecision.
When you have completed all sections of this worksheet,please click the "continue" button below. This action will saveyour answers and advance you to the next worksheet in thisassignment. If you wish to save your current work and then returnto this worksheet at a later time, click the "save work" buttonbelow. Please note that this action will truncate any response thatexceeds the 8,000 character limit.
