Please help with this assignment! Thanks ATC 7-5 Ethical Dilemma Sometimes debt
ID: 415384 • Letter: P
Question
Please help with this assignment! Thanks
ATC 7-5 Ethical Dilemma Sometimes debt is not debt David Sheridan was a well-respected CPA in his mid-fifties. After spending 10 years at a national ac- counting firm, he was hired by Global, Inc., a multinational corporation headquartered in the United States. He patiently worked his way up to the top of Global's accounting department, and in the early 1990s, took over as chief financial officer for the company. As the Internet began to explode, manage- ment at Global, Inc. decided to radically change the nature of its business to one of e-commerce. Two years after the transition, Internet commerce began to slow down, and Global was in dire need of cash in order to continue operations. Management turned to the accounting department. Global, Inc. needed to borrow a substantial amount of money but couldn't afford to increase the amount of liabilities on the balance sheet for fear of the stock price dropping and banks becomingExplanation / Answer
a.
David has introduced some new approach to raising the necessity of cash in the process of operation without reflecting on the balance sheet. David has set up a certain obscure rule in which a company can set up a legal organization which will contribute 3% of the startup capital. A friend of David named as Brian has participated in the entity of the business with Global and played an important part in investing the stock to make it financially stable and growing.
b.
1. It basically provides guidance to the members in their professional dealings of several matters and responsibilities.
2. It allows the members to follow the rules and maintains many legal proceedings for the members who do not follow the rules.
Violations are-
The unethical behavior in the organization cannot be justified by the people.
c. From auditors point the fraud activity:
1. Financial misstatement - It is arising because of the error in work which is leading to fraud activity. The fraud can be done intentionally by misplacing the statements but it may not be. The auditors identify the misconduct happening in the organization's process and treat them as a fraud.