Jul 21, 2017 Research papers

What will the effects be of the overall transactions on reported income for 2009?

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Ethics of Successful enterprise

INSTRUCTIONS:

Please write a review on each discussion. please keep separate. 1. It appears that Steinbach is taking these actions so the company will appear more qualified for the anticipated 2010 loan, than it actually is; possibly to obtain a lower interest rate. The effects of these transactions would (falsely) show that the company is generating more revenue from sales, and that all debts are being paid (workers` salary, expired insurance). Since the purchase will not ship until after 2009, I do not believe that this is ethical. Technically, Steinbach is asking the accountant to falsely alter data for the annual report. If this accountant were my coworker, I would tell him that he should not alter the data for 2009; he should explain to Stienbach that the situation is unethical, and it can cause issues in the future. I can not think of anything that would be considered ethical to help the situation, other than reporting the correct data, and explaining to the bank (if asked) the purpose of the loan. I am not sure if there are any unethical actions that would help this situation. Stenbach is asking his accountant to lie, so if the goal is to show an increased revenue through false documentation, then a larger amount of falsely reported data would help that goal. 2. The net income of Steinbach & Sons, a department store, decreased sharply during 2009. Mort Steinbach, owner of the store, anticipates the need for a bank loan in 2010. Late in 2009, Steinbach instructs the store`s accountant to record a $2,000 sale of furniture to the Steinbach family, even though the goods will not be shipped from the manufacturer until January 2010. Steinbach also tells the accountant to make the following December 31, 2009, adjusting entries: Salaries owed to employees...........................$900 Prepaid insurance that has expired.................$400 · What will the effects be of the overall transactions on reported income for 2009? Why would Steinbach take these actions? Depending on how much money he first invested in the back, the effects may vary. However, based on the information presented, the company appears to be using more money than they are making. · Is this ethical? Why or why not? No, it`s not ethical because the owner of the business is not investing anything to better than company, he`s spending all of his earnings. · What advice would you give this accountant? Why? I would advise him to invest before buying new equipment/furniture until his business is steadily building itself up. · Is there an alternative action that is ethical to help the situation? Just save and invest. Let the money increase and to spend wisely. · Is there an alternative action that is not ethical that would help the situation? No. lesson (if needed). The net income of Steinbach & Sons, a department store, decreased sharply during 2009. Mort Steinbach, owner of the store, anticipates the need for a bank loan in 2010. Late in 2009, Steinbach instructs the store`s accountant to record a $2,000 sale of furniture to the Steinbach family, even though the goods will not be shipped from the manufacturer until January 2010. Steinbach also tells the accountant to make the following December 31, 2009, adjusting entries: Salaries owed to employees...........................$900 Prepaid insurance that has expired.................$400

CONTENT:
NameInstitutional AffiliationDateQuestion 1Ethics is one of the core pillars of any successful enterprise. The fact that a business is able to thrive through the observance of ethical standards puts the business in a very prime position-a position that favors rapid growth and expansion, as well as increased revenues and cash flows. Based on the fact that Steinbach’s business recorded a loss in the year 2009, it is only ethical that Steinbach reviews the company’s expenditure to assess its chances of being awarded the loan. Asking the accountant to falsify company records in order to obtain a bank loan is tantamount to fraud, and bears the possibility to tying up the company in years of endless litigation. Asking the accountant to record a premature furniture purchase of $2000 to give the perception of proper cash flow does very little to remedy the situation.The company is spending more than it makes, and the owner would do well to address this matter. It is unethical to obtain a ...


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