Dilehmas in the accounting Profession
Qualify or Not?
Acc/260
November 3, 2013
Qualify or Not?
Viccio and Martin staff accountant Jane Ashley was assigned to work on an audit team with one senior auditor Frankie Small. The audit they were to perform was on the top paying client of Viccio and Martin, Models Inc.. Jane had spent time working for the firm while finishing her academics, and had been present for many other audits. This left her excited to show her employer all she had learned during this first assignment. Jane was away at school when the yearend inventory count was made for Models Inc., so she decided to brush up before the audit began by studying the financials, audit notes, previous audits, and the inventory counts performed. Upon doing so, she encountered the first of many issues that would have her faced with the first ethical dilemma of her career. The dilemma, signing off on false information and knowingly overlooking discrepancies in where inventory was inflated and cost of goods sold deflated to keep the company from showing a loss for the year, or report the issues and possibly cause the company to have its loan called by the bank and go out of business. This dilemma would also include a personal aspect in that Jane faced the decision that could cost her the loss of her job or her credibility. The events leading to this dilemma include the poor inventory management system the company has in place. The mistakes made either intentionally or unintentionally by the accounts payable clerk also contributed to the problems. Another issue was the decision and pressure from her superiors and the upper management of the client.
All of these issues have an effect on the stakeholders involved; the first stakeholder to consider is the bank holding the operating loan. They requested the audit to ensure their investment was still a sound one. The next stakeholders to be considered are the suppliers, they use the financial information to determine whether to continue to
Acc/260
November 3, 2013
Qualify or Not?
Viccio and Martin staff accountant Jane Ashley was assigned to work on an audit team with one senior auditor Frankie Small. The audit they were to perform was on the top paying client of Viccio and Martin, Models Inc.. Jane had spent time working for the firm while finishing her academics, and had been present for many other audits. This left her excited to show her employer all she had learned during this first assignment. Jane was away at school when the yearend inventory count was made for Models Inc., so she decided to brush up before the audit began by studying the financials, audit notes, previous audits, and the inventory counts performed. Upon doing so, she encountered the first of many issues that would have her faced with the first ethical dilemma of her career. The dilemma, signing off on false information and knowingly overlooking discrepancies in where inventory was inflated and cost of goods sold deflated to keep the company from showing a loss for the year, or report the issues and possibly cause the company to have its loan called by the bank and go out of business. This dilemma would also include a personal aspect in that Jane faced the decision that could cost her the loss of her job or her credibility. The events leading to this dilemma include the poor inventory management system the company has in place. The mistakes made either intentionally or unintentionally by the accounts payable clerk also contributed to the problems. Another issue was the decision and pressure from her superiors and the upper management of the client.
All of these issues have an effect on the stakeholders involved; the first stakeholder to consider is the bank holding the operating loan. They requested the audit to ensure their investment was still a sound one. The next stakeholders to be considered are the suppliers, they use the financial information to determine whether to continue to