Description
Accounting Ethics Case Study
When the FASB issues new standards, the implementation date is often 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fairer presentation of the company's financial condition and earnings.
When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required.
Write a response of 750 to 1,050 words in which you answer the following requirements:
Determine an ethical issue that is involved in this case if any.
Identify if the financial vice president acting improperly or immorally.
Explain what Hoger have to gain by advocacy of early implementation.
Identify who might be affected by the decision against early implementation.
Explanation & Answer
Attached.
Accounting Ethics Case Study-Outline
Thesis: An early implementation of new FASB standards would result in a fairer presentation of
the company's financial conditions and earning. The moral issue associated with this move is the
conflict of interest in the management of the company.
The paper analyzes the case as follows:
I.
II.
Ethical Issue
Vice President’s Actions
III.
Early implementation
IV.
Decision against Early Implementation
V.
Conclusion
Running head: ACCOUNTING ETHICS CASE STUDY
Accounting Ethics Case Study
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Institution
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ACCOUNTING ETHICS CASE STUDY
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Accounting Ethics Case Study
Ethical Issue
An early implementation of new FASB standards would result in a fairer presentation of
the company's financial conditions and earning. The moral issue associated with this move is the
conflict of interest in the management of the company. It would be right for the company to
implement the new standards as early as possible. The move would, however, be ethically wrong
if it is intended at making the company look more profitable or to make the managers look
efficient in running the company. The ethical issues could arise if the salaries and benefits of the
executives are based on the net profits of the company. The vice president seems to discourage
Hoger from implementing the st...