What should Nancy do in this situation?why? Discussion TopicNancy Thomas is the chief accountant at Company C, a manufacturer of medical equipment. The company is underpressure from creditors to increase its earnings. Shortly after the end of the fiscal year, the company performed aphysical count of the inventory. A significant amount of inventory shrinkage was discovered. The amount is so largethat it will result in a significant drop in earnings this period. The decrease in earnings will hurt the company's chanceat getting a much needed loan at a low interest rate. Nancy is thinking of not reporting the shrinkage until next period,after the company gets its loan.C

Answered: What should Nancy do in this…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What should Nancy do in this situation?why?

Discussion Topic
Nancy Thomas is the chief accountant at Company C, a manufacturer of medical equipment. The company is under
pressure from creditors to increase its earnings. Shortly after the end of the fiscal year, the company performed a
physical count of the inventory. A significant amount of inventory shrinkage was discovered. The amount is so large
that it will result in a significant drop in earnings this period. The decrease in earnings will hurt the company's chance
at getting a much needed loan at a low interest rate. Nancy is thinking of not reporting the shrinkage until next period,
after the company gets its loan.
C

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Ethical rules and accountability are of the utmost significance in the field of accounting. The accuracy and precision of financial knowledge, which is crucial for the achievement of enterprises and organizations, is the duty of accounting experts. Being committed to acting with truth, transparency, and openness in all facets of one's job is a requirement for professional as well as ethical accountability in the professional accountants. The accuracy, completeness, and compliance with applicable accounting rules and laws of financial accounts are the responsibility of accounting experts.

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