Falling Boxes On January 31, an improperly stacked box fell from the top shelf of a warehouse, injuring an employ-ee. The employee was hit, fell, and broke his wrist. Your company self-insures for the risk of such incidents ratherthan paying an insurance company to absorb the risk of such claims. The employee has been treated for his injuriesand has retained a lawyer. The lawyer has not yet filed a formal claim with the company. According to your internalrisk management team, the amount of claim likely to be sought by the employee could range between $50,000 and$300,000. Is your company required to record a liability for this incident? When, and for what amount? What dis-closures are required, if any?oludin

Answer with Explanation are as follows

Answered: Falling Boxes On January 31, an…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter4: Ethical Responsibilities Of Accountants

Section4.5: Wiley Jackson, Accounting Major

Problem 2Q

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Able, a Certified Fraud Examiner, interviewed a suspect involved in an environmental crime. The suspect, Blake, admitted to purposely polluting the environment. Blake’s action eventually caused almost thirty people to develop serious environmentally related illness. Upon hearing this fact from Blake, Able should: A. Scold Blake for his conduct. B. Make no comment whatever. C. Treat Blake with decency and respect. D. Ask Blake to apologize to the victims.
Paragon Tech Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Paragon Tech’s procedures for the purchase of services. The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorizedmanager. However, because no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Paragon Tech for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.The fraud scheme involves Mae Jansma, the manager of plant and facilities. Mae arranged for her uncle’s company, Radiate Systems, to be placed on Paragon Tech’s approved vendor list. Mae did not disclose the family relationship. On several occasions, Mae would submit a requisition…
As an accountant at a company that has a business in a disastrous weather area, how should I account for a probable loss from a future disaster as a liability? Are there any possible ethical violations to avoid?
At most movie theaters, one employee sells tickets and another employee collects them. Onenight, when you’re at the movies, your friend comments that this is a waste of the theater’smoney.Required:1. Identify the name of the control principle to which this situation relates.2. Explain to your friend what kind of fraud could occur if the same person did both jobs
Reimbursements In May 2007, a local chemical plant had an unfortunate accident. Chemicals leaked from a plant holding tank and seeped onto the parking lot. A number of employee vehicles were damaged and required repainting. The company agreed to reimburse employees for the cost of these repairs. Employees were instructed to submit their bills for the repairs to the Controller, Rob Trout. Rob would then issue a check to the employee for the amount of the bill. While the Internal Auditor Director questioned the Audit Committee about the monitoring of the reimbursements during a meeting a month after the accident, the Committee determined that procedures in place were adequate. Nine months later, at a full board meeting, someone made a remark about the fact that bills were still being turned in for reimbursement. By this time, the total of the damages reimbursed to employees had reached nearly $150,000. After making inquiries, it was discovered that some of the “repairs” were for…
Curtis, a maintenance supervisor, submitted maintenance invoices from a phony repair company and received the checks at a post office box. This should have been prevented bya. Comparison of the company name to the approved vendor list by the check signer.b. Recognition of the excess maintenance costs by Curtis’s supervisor.c. Refusal by the purchasing department to approve the vendor.d. All of the above.
As the auditor for Company A, you discover that a material sale ($500,000 sale; cost of goods of $300,000) was made to a customer this year. Because of poor internal accounting controls, the sale was never recorded. Your client makes a management decision not to bill the customer because such a long time has passed since the shipment was made. You determine, to the best of your ability, that the sale was not fraudulent. Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction. Instructions: Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction. Please make sure to use at least 100 words in your response. Once you give your response, please respond to at least two of your peers using at least 50 words in your responses. Remember to follow the netiquette guidelines found in the course…
Mark Buffalo works for a mid-size accounting firm in Boston. One day he overhears a colleague talking to a friend on his cellphone. Mark gasps when he realizes the colleague is sharing one of their client's confidential information, likely as an insider trading tip. As a member of the AICPA, Mark is required to report this discreditable act to the Boston chapter of the AICPA. Select one: True False
Donald Waddell got a job at the Boyce Thompson Institute for Plant Research. Waddell did not have an employment contract for a fixed term, and the institute’s employee manual said that his job was “terminable at will.” Soon after he was hired, the institute implemented a whistleblower policy designed to encourage “the highest standards of financial reporting and lawful and ethical behavior.” Waddell repeatedly told his supervisor, Sophia Darling, that she needed to file certain financial documents more promptly. Darling fired Waddell, telling him that he was disrespectful and insubordinate. Define “at will” employment and wrongful termination. Based on the evidence given, was Waddell wrongfully terminated? Why, or why not.
A customer has filed a suit against a trader who has supplied poor quality goods to him. It is known that the court judgment will be in favour of the customer and the trader will be required to pay the damages. However, the amount of legal damages is not known with certainity. The accounting year has already been ended and the books are now finalised to ascertain true profit or loss. The accountant of the trader has advised him not to consider the expected loss on account of payment of legal damages because the amount is not certain and the final judgment of the court is not yet out. Do you think the accountant is right in his approach.
Suppose you are working in an organization where your best friend is your colleague. One day due to some technical problem the biometric machine for attendance was not working for one week. Your best friend is coming late to the company daily as he need not have to record attendance. Your friend is happy upon not entering attendance and not coming on time. Whereas you do not agree with him and advised him to correct. He refused to do it so. If you insist on him you will lose your best friend. Based on this choose the type of dilemma you face a. Personal ethical dilemma b. Organizational ethical dilemma c. Societal ethical dilemma d. Professional ethical dilemma

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