agine you are the accountant for Drive Write, a company that produces computer disk drives, and you are in charge of all accounting functions within the company. The president has informed you that if the company's profits grow by 20 percent this year, you will receive a $20,000 bonus, and she will receive a S50,000 bonus. No bonuses will be awarded if profit growth is less than 20 percent. Because the company's profits have grown 20 percent annually for the last 10 years, investors have come to expect significant growth from one year to the next. Near the end of this fiscal year, the president and you have the following conversation: We are awfully close to hitting our numbers and getting to the 20 percent target. With two weeks remaining, projections show we will come in at 18 percent for the year. What can we do on the accounting side to increase President current vear profits? Well, I'm not sure there is anything we can do. Our accounting is squeaky clean, as confirmed by our independent auditors. Perhaps our sales will Accountant mprove next vear. There has to be something we can do-I could sure use the bonus money, and our investors would appreciate an increase in their investment! I know we have a large customer order to be filled the first week of next year. Why not President include that sale in this vear's numbers? Accountant I'm not comfortable recording sales in the wrong fiscal year We're only talking about moving sales by a few days! I would like you to consider this carefully. If you can't do this, I may have to find an accountant President: who can! Let's talk about our options later this week. Question: The situation at Drive Write creates a serious ethical dilemma. (The Drive Write example is based on a real company called MiniScribe Corporation, subsequently purchased by a competitor.) Companies are constantly under pressure to meet sales and profit goals. Employees who succeed in meeting these goals often reap huge monetary rewards; those who fail may be penalized with lower pay or may even lose their jobs Item 1-Review the IMA Statement of Ethical Professional Practice found at https://www.imanet.org/insights-and-trends/business-leadership-and-ethics/ima-statement-of-ethical- rofessional-practice?ssopc- (Opens in a new window.) Plain text: https://www.imanet.org/insights-and-trends/business-leadership and-cthics/ima-statcmcnt-of-cthical-profcssional-practicc?ssopc-1 Item 2 - With that information in mind, discuss the following questions. Your posting should be at leas 500 words in length. You should also reference information already learned in our studies Describe the four key standards of ethical conduct for IMA members outlined in the IMA Statement of Ethical Professional Practice 1. 2. What steps does the IMA recommend for resolving ethical conflicts? 3. Using the IMA Statement of Ethical Professional Practice as a guide, discuss your options as the accountant at Drive Write

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please help with this question.

 

agine you are the accountant for Drive Write, a company that produces computer disk drives, and you
are in charge of all accounting functions within the company. The president has informed you that if the
company's profits grow by 20 percent this year, you will receive a $20,000 bonus, and she will receive a
S50,000 bonus. No bonuses will be awarded if profit growth is less than 20 percent. Because the
company's profits have grown 20 percent annually for the last 10 years, investors have come to expect
significant growth from one year to the next. Near the end of this fiscal year, the president and you have
the following conversation:
We are awfully close to hitting our numbers and getting to the 20 percent
target. With two weeks remaining, projections show we will come in at 18
percent for the year. What can we do on the accounting side to increase
President
current vear profits?
Well, I'm not sure there is anything we can do. Our accounting is squeaky
clean, as confirmed by our independent auditors. Perhaps our sales will
Accountant
mprove next vear.
There has to be something we can do-I could sure use the bonus money, and
our investors would appreciate an increase in their investment! I know we
have a large customer order to be filled the first week of next year. Why not
President
include that sale in this vear's numbers?
Accountant
I'm not comfortable recording sales in the wrong fiscal year
We're only talking about moving sales by a few days! I would like you to
consider this carefully. If you can't do this, I may have to find an accountant
President:
who can! Let's talk about our options later this week.
Question: The situation at Drive Write creates a serious ethical dilemma. (The Drive Write example is
based on a real company called MiniScribe Corporation, subsequently purchased by a
competitor.) Companies are constantly under pressure to meet sales and profit goals. Employees who
succeed in meeting these goals often reap huge monetary rewards; those who fail may be penalized with
lower pay or may even lose their jobs
Item 1-Review the IMA Statement of Ethical Professional Practice found
at https://www.imanet.org/insights-and-trends/business-leadership-and-ethics/ima-statement-of-ethical-
rofessional-practice?ssopc-
(Opens in a new window.) Plain text: https://www.imanet.org/insights-and-trends/business-leadership
and-cthics/ima-statcmcnt-of-cthical-profcssional-practicc?ssopc-1
Item 2 - With that information in mind, discuss the following questions. Your posting should be at leas
500 words in length. You should also reference information already learned in our studies
Describe the four key standards of ethical conduct for IMA members outlined in the IMA
Statement of Ethical Professional Practice
1.
2.
What steps does the IMA recommend for resolving ethical conflicts?
3.
Using the IMA Statement of Ethical Professional Practice as a guide, discuss your options as the
accountant at Drive Write
Transcribed Image Text:agine you are the accountant for Drive Write, a company that produces computer disk drives, and you are in charge of all accounting functions within the company. The president has informed you that if the company's profits grow by 20 percent this year, you will receive a $20,000 bonus, and she will receive a S50,000 bonus. No bonuses will be awarded if profit growth is less than 20 percent. Because the company's profits have grown 20 percent annually for the last 10 years, investors have come to expect significant growth from one year to the next. Near the end of this fiscal year, the president and you have the following conversation: We are awfully close to hitting our numbers and getting to the 20 percent target. With two weeks remaining, projections show we will come in at 18 percent for the year. What can we do on the accounting side to increase President current vear profits? Well, I'm not sure there is anything we can do. Our accounting is squeaky clean, as confirmed by our independent auditors. Perhaps our sales will Accountant mprove next vear. There has to be something we can do-I could sure use the bonus money, and our investors would appreciate an increase in their investment! I know we have a large customer order to be filled the first week of next year. Why not President include that sale in this vear's numbers? Accountant I'm not comfortable recording sales in the wrong fiscal year We're only talking about moving sales by a few days! I would like you to consider this carefully. If you can't do this, I may have to find an accountant President: who can! Let's talk about our options later this week. Question: The situation at Drive Write creates a serious ethical dilemma. (The Drive Write example is based on a real company called MiniScribe Corporation, subsequently purchased by a competitor.) Companies are constantly under pressure to meet sales and profit goals. Employees who succeed in meeting these goals often reap huge monetary rewards; those who fail may be penalized with lower pay or may even lose their jobs Item 1-Review the IMA Statement of Ethical Professional Practice found at https://www.imanet.org/insights-and-trends/business-leadership-and-ethics/ima-statement-of-ethical- rofessional-practice?ssopc- (Opens in a new window.) Plain text: https://www.imanet.org/insights-and-trends/business-leadership and-cthics/ima-statcmcnt-of-cthical-profcssional-practicc?ssopc-1 Item 2 - With that information in mind, discuss the following questions. Your posting should be at leas 500 words in length. You should also reference information already learned in our studies Describe the four key standards of ethical conduct for IMA members outlined in the IMA Statement of Ethical Professional Practice 1. 2. What steps does the IMA recommend for resolving ethical conflicts? 3. Using the IMA Statement of Ethical Professional Practice as a guide, discuss your options as the accountant at Drive Write
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Payments(ras), Appeals and Secondary Claims
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education