What are the business ethical issues? What are the professional ethical issues for Flexible’s CPA Partner?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Facts:
- A Chicago area manufacturing company (“JKL”) has 2 unrelated owners. The CPA firm (“Flexible”) for the manufacturing company prepares annual compiled financial statements and corporate tax returns (1120S). In addition, Flexible prepares the personal income tax returns for one of the owners – a different tax accountant prepares the personal income tax returns for the other owner. The Company has a December 31st year end.
- Toward the end of February each year, there is an annual meeting in the western suburbs, with the following in attendance: the 2 owners of JKL, Flexible’s CPA Partner, the tax accountant for the other owner, and pension consultants.
- In anticipation of the meeting, Flexible prepares and distributes draft financial statements, and a year to date General Ledger; everything is complete except the amount of any pension accrual and the final amount of inventory.
- The purposes of the meeting are to determine:
- the pension accrual
- the desired taxable income for the year
- the amount of inventory necessary to bring taxable income to the desired level (achieved through a debit or credit to inventory with an offsetting debit or credit to cost of goods sold).
Required: For the situation described above, please answer the following two questions:
- What are the
business ethical issues? - What are the professional ethical issues for Flexible’s CPA Partner?
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