Week 8 Checkpoint-Breifly Applying a Decision-Making Framework

Week 8 Checkpoint-Breifly Applying a Decision-Making Framework

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1. Who are the stakeholders involved in this decision? The stakeholders involved are Anne Distagne the CEO, Sue Fault, Linkage Construction’s shareholders, Linkage Construction’s current customers/clients and potential customers/clients, Linkage Construction’s employees, and the banks Anne will be dealing with. 2. What are the ethical issues involved? The major ethical issue involved is dishonesty. Anne wants Sue as accountant to fudge the years accounting figures by reporting lower percentage of job completion figures and to expense costs for research and development for a flexible ducting system that are part of job costs in inventory for two jobs. 3. What should Sue do? Sue should consider if what she is asked to do goes against generally accepted accounting practices, being as this is a construction company much of their expenses are considered inventory and when materials are removed from inventory to do
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Unformatted text preview: part of a job it is expensed. The accountant usually figures how far along a job is percentage wise based on how much inventory is used. Most construction companies also get paid on a draw basis, which means they prepare a sworn statement for the job they want money from and list everyone and everything they are requesting money for. If Sue’s company requests funds on a draw basis for the work completed for the jobs they are working on she should not do as Anne wishes her to do. The company would have records that what Anne is asking Sue to do is not so. Doing as Anne wishes could be considered fraud and cause the company to lose business and money when it is found out that Sue fudged accounting records. Sue should take the matter to the board of directors letting them know what Anne wants done and the consequences of agreeing to take this action and let them deal with Anne Distagne....
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This note was uploaded on 09/06/2010 for the course ACC 225 acc 225 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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