Prepure a writen memo to the bank president, outlining the procedures that shoul
ID: 2328812 • Letter: P
Question
Prepure a writen memo to the bank president, outlining the procedures that should be followed to prevent this type of problem in the future. Required ATC 4-5 Ethical Dilemma I need just a little extra money John Riley a certified public accountant, has worked for the past eight years as a payroll clerk Southeast Industries, a small furniture manufacturing firm in the Northeast. John recently experienc unfortunate circumstances. His teenage son required major surgery and the medical bills not covered by John's insurance have financially strained John's family John works hard and is a model employee. Although he received regular performance raises dur ing his first few years with Southeast, John's wages have not increased in three years. John asked his supervisor. Bill Jameson, for a raise. Bill agreed that John deserved a raise, but told him he could not A disappointed John returned to his duties while the financial pressures in his life continued. Two weeks later, Larry Tyler, an assembly worker at Southwest, quit over a dispute with management. John currently approve one because of sluggish sales.Explanation / Answer
Part (a):
Balance sheet contains the amount of assets and liabilities of an organization as on a particular date. It reflects the financial position of an organization as on a particular date. The balance sheet of Southeast will not be affected in terms of tallying the amount of assets and liabilities. As the double entry system of accounting will ensure that Balance sheet tallies despite the fraud committed by John. However, the payment is not genuine and it is syphoning off the funds of the company for personal benefit of an employee. Thus, it is a failure of control and thus, balance sheet will not be affected as balance sheet will still tally despite the fraud.
Part (b):
In order to maintain standards for the individual it is important to have professional code of conduct for any profession. AICPA has issued number of standards to maintain professional code of conduct. In this case John has certainly violated the professional code of conduct of AICPA by committing fraud on the company. He has committed fraud by delaying the termination process of Tyler to divert the fund by forging time card of Tyler. He delayed the processing of Tyler’s termination thus, failed to discharge his duties towards the company.
Part (c):
Three elements of unethical and criminal conduct recognized are as following: