Discuss the ethical and governance issues

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Reference no: EM131209699 , Length: word count:2500

Financial Accounting Assignment-

Pringles Ltd is a large department store that has used the straight-line depreciation method since the company was first formed. For the year ended 30 June 2016, the company made a record profit and management expected these high profits to continue at least into 2017 and 2018, although economists were generally predicting an economic slowdown and a subsequent fall in profits in 2019 and 2020. The CEO, Peter Pringle, approached the accountant, Marion Mason, and asked her if she could find a way to reduce the profit in the next couple of years and transfer to 2019 and 2020 when things may not be going so well. 'This would give us consistent profits over the next few years and keep our shareholders happy,' said Peter.

Although Marion did not feel Peter's reason for the change was justified, she was concerned that her contract with the company would not be renewed if she upset the general manager. After some consideration she decided to change the depreciation method from the straight-line method to the sum-of-digits method. Marion did not disclose this change in the notes to the financial statements as she felt that the reason given by Peter would not give a good impression.

Required: Discuss the ethical and governance issues in changing the depreciation methods in the case above.

2500 words

15 Harvard references.

Reference no: EM131209699

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len1209699

9/17/2016 1:22:39 AM

Agency theory.....agency problem......governance.......accountability.....transparency. (Need to look up) and also need to add different theory of accounting like positive and normative theory of accounting. ethical issue and corporate governance and issue and also need to add some related real life example of similar case, and also how this issue occur in the question can be solve for example financial issue for not disclosing the report ethical issue for changing the system in the risk of loosing. Research requirement - Students should support their analysis with reference to their text and a minimum of eight current references of which a minimum of two should be from academic journals. Maximum 2500 word short report format. Title page, executive summary, table of contents, appropriate headings and sub-headings, recommendations/findings/conclusions, in-text referencing and reference list (Harvard — Anglia style).

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