Can someone please summarize (two paragraphs please) how this is an ethical dile
ID: 2466563 • Letter: C
Question
Can someone please summarize (two paragraphs please) how this is an ethical dilemma in accounting language? I have to submit it by 11:30 and forgot all about it. Ethical Dilemma As a second-year accountant for McCormack Chemical Company, you were excited to be named assistant manager of the Agricultural Chemicals Division. After two weeks in your new position, you were supervising the year-end inventory count when the senior manager mentioned that two carloads of herbicides were omitted from the count and should be added. Upon checking, you confirm your understanding that the inventory in question had been deemed to be unsalable. "Yes," your manager agreed, "but we'll write that off next year when our bottom line won't be so critical to the continued existence of the Agricultural Chemicals Division. Jobs and families depend on our division showing well this year."Explanation / Answer
If we see the issue raised by assistant manager it is correct and should be noted as obsolte inventory and should be written off in the books. But what the manager told is unethical as it is against the GAAP/IFRS rules and this will affect the outside investors who are shareholders of the comppany. If in internal /external auditing this question raised then it will create a mess for compnay by which jobs and families of the company will be affected
As per accounting standard the inventory should write off by which the gross profit and net profit will come down. But what the manager told is called managing earnings and it is against standards