Acct3563 Individual Report Essays

1166 Words Sep 2nd, 2013 5 Pages
1. Define the problem
As an accountant, I am aware that the company has been smoothing its profits during the previous years. I also suspect that the company will draw down funds from the reserve account to smooth out the damages that the contamination issue have on its profit for the year.
Who are the stakeholders
The stakeholders of the company include:
Internal stakeholders * Me * Mr. Robson * Company Board of Directors * Employees of the company
External stakeholders * Shareholders/Investors * Creditors/Debt-holders

2. Ethical principles (Utilitarianism)
Ethics are concerned with the fundamental concepts and principles of decent human conduct; which is having a sense of what is right and wrong. Utilitarianism
…show more content…
However, a majority of utilitarian theories uphold that wellbeing comes from fulfilling desires particular those that are long-standing and gaining pleasure coming from not only one person’s mind; but also from external events and state of affairs. In this case; welfare of the stakeholders surrounding the company will be: * Shareholders – Return on investment such as capital gains or dividend payout * Creditors – Return on debt that are borrowed to such company * Employees of the company – job security, remuneration package * Board of Directors – Transparency of company operations as they are to elect the management team for the company, remuneration package

3. Consider the options
Given my suspicion on the ongoing income smoothing practices and my present concern that the company may use its hidden reserves to reduce the impact of the recent water contamination issue on its current year profit, alternative course of actions that I can take are: * Bringing the case to Australian Securities and Investment Commission (ASIC) * Doing nothing * Raising the issue to the board of directors

4. Investigating the outcomes
Bringing the case to ASIC
By bringing the case to the ASIC, the internal stakeholders involved in the financial statement fraud would be imposed either fine of $22000 per offence committed or imprisonment up to five years and or both under s 1309, “Serious breach of a listed companies’ continuous

Related Documents