Ais Answer Essay

2012 Words Apr 14th, 2013 9 Pages
ACC3101 Student Activities Module 5 Solutions

SUGGESTED ANSWERS TO DISCUSSION QUESTIONS

Discussion Questions

P 11.13 Prepare a DFD context, Level 0

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P 11.10 Prepare a Document flowchart

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Ethics Use Stakeholder analysis framework to answer the ethical dilemma below (Horngren et al 5th ed p128)

The net profit of Bynum & Hobbs, a department store, decreased sharply during the first part of 2008. Ron Bynum, owner of the store, anticipated the need for a bank loan in the last months of 2008. In June 2008, Bynum instructs the store’s accountant to record a $6 000 sale of furniture to the Bynum family, even though the goods won’t be shipped from the manufacturer until July 2008.
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Harmed – Creditors, and the lenders (other owners if there are any). Benefited – Owner, employees

• Whose rights or claims may be violated? Lenders, creditors, employees

• Which specific interests are in conflict? To deliberately overstate revenue and net profit as well as understate inventory on the balance sheet for the year is dishonest and unethical. It contravenes most of the fundamental principles of the APES 110 Code of Ethics for Professional Accountants: Integrity, Objectivity, Professional Competence and Due Care, and Professional Behaviour. The owner’s own position and potentially the jobs of the employees (including the accountant’s) are at stake if the business liquidates due to inability to obtain finance (the loan).

• What are my responsibilities and obligations as an accountant advisor? The accountant advisor is bound by the Code of Ethics for Professional Accountants and has a duty of care that extends beyond the firm, colleagues and owners/shareholders and includes other stakeholder groups who may not have a financial interest in the firm - including the community.

3. Identify alternatives and asses impact of each on stakeholders 1. Do nothing – breach of professional ethics to act in the best interests of all stakeholders.

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