Explain the importance of ethics in accounting

Assignment Help Accounting Basics

Reference no: EM133572854

Homework: Litigation, Censures & Fines

You are the accountant for ACC KarParts, a thriving company that makes auto parts. You oversee all accounting functions within the company. Quinn, your supervisor, has informed you that if the company's profits grow by 30% this year, you will receive a $30,000 bonus, and she will receive a $60,000 bonus. No bonuses will be awarded if profit growth is less than 30%. Near the end of this fiscal year, the two of you have the following conversation:

I. Quinn: We are getting close to 28% profit by the end of this year. If this happens, neither you nor I will get any bonus. What can be done to reach our target and get our bonus?

II. You: There is nothing we can do to reach 30% profit this year. However, we can plan to reach that target next year.

III. Quinn: If we claim some of next year's revenue as part of the current year, you will get your bonus, I will get mine, and the investors will be happier. Therefore, everybody will be happy.

IV. You: Uh, Quinn, that would be an unethical action.

V. Quinn: We are simply moving revenue from one period to another. We are not faking the revenue transactions.

As an accountant, what would you do in this situation?

Instructions

Write a 2 to 3 pages report explaining to Quinn why you can't move revenue from one period to another. In the report:

Question I. Explain the importance of ethics in accounting.

Question II. Apply ethical principles and professionalism to the case at ACC KarParts.

Question III. Based on generally accepted accounting principles, recommend at least three acceptable legal alternatives to meet company goals.

The specific course learning outcome associated with this homework is:

I. Evaluate a business's accounting system for compliance with accounting principles, regulations, and ethical business practices.

Reference no: EM133572854

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