Thank you for the opportunity to help you with your question!
are the stakeholders in this situation? Should they be the preparers' main
concern? Why? Why not?
In this situation. 10 stockholders
of the Riverside Automotive corp. 8 President and CEO Carl Stewart are the
stakeholders. Stockholders will get the dividend and Carl Stewart's job is
secure as long he produces supporting annual operating cash flows. Therefore
stockholders and the President are the stakeholders in this situation.
there anything unethical about the President's actions? Was there anything
unethical about the controller's actions? Explain.
Yes, the president's action was
unethical. The President Carl Stewart asks to the controller to increase the
operating cash flows by $30,000. just because he wanted to secure his job.
Yes, the controller's action was
also unethical. It was controller's responsibility to prepare the financial
statements which give true and fair view of the companys financial position.
Controller misrepresents the financial statements for the sake of President's
job which is not ethical at all.
the board members or anyone else likely to discover the misclassification?
Yes, the Audits can discover this
misclassification. It is the responsibility of an audits to detect the fraud.
Audits also ensures that the financial statements are presented in conformity
with the comprehensive basis of accounting. In this way the audits can detect
Please let me know if you need any clarification. I'm always happy to answer your questions.
Jan 15th, 2016
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