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Week 1 - Principles must abide by(honesty fairness...

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Maria Mendez is a division controller and James Dalton is division manager of the Hestor Shoe Company. Mendez has line responsibility to Dalton, but she also has staff responsibility to the company controller. Dalton is under severe pressure to achieve the budgeted division income for the year. He has asked Mendez to book $200,000 of revenues on December 31st. The customers' orders are firm, but the shoes are still in the production process. They will be shipped on or around January 4th. Dalton says to Mendez, "The key event is getting the sales order, not shipping the shoes. You should support me, not obstruct my reaching division goals." 1. Describe Mendez's ethical responsibilities. It’s clear that Mendez’s ethical responsibilities are to be honest and do what’s right to ensure the company’s integrity and uphold their credibility. In order to do what’s right Mendez needs to follow the guidelines set by the IMA (Institute of Management Accountants). The IMA has several guidelines to follow including (p. 19):
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Unformatted text preview: Principles must abide by (honesty, fairness, objectivity, and responsibility) Standards follow or disciplinary action taken Competence act professional, communicate effectively, use appropriate skills required Confidentiality do not disclose any information without approval Integrity refrain from doing anything that would jeopardize the company or yourself Credibility communicate fair and objectively 2. What should Mendez do if Dalton gives her a direct order to book the sales? Mendez should make it known to Dalton what the IMA guidelines are and that they can both get in trouble for going through with the order. Doing this would make Dalton understand that what hes wanting is in a direct violation of the IMA guidelines. If Dalton forces the issue Mendez should report him to a member of management higher than herself. Horngren, Charles T., [et al.] (2015) Cost Accounting: A Managerial Emphasis (15 th ed .) Upper Saddle River, NJ: Pearson/Prentice Hall....
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