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Firefox aboutsrcdoc 12 of 14 01092022 953 pm ken

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Firefoxabout:srcdoc12 of 1401/09/2022, 9:53 pm
Ken should not comply with the request.Mark allocationTotal of two2marks will be awarded: one1mark will be awarded for identifying each relevant principle and one2mark for explaining the issues and the making an appropriaterecommendation.Potential (but less plausible) answerProfessional Competence and Due Care (s. 113requires accountants to prepare their work ‘carefully and thoroughly’ and to produce ‘credible and accurate reports’. Ken may breach this principle becauseby overestimating sales revenue in the cash flow report, he is producing an inaccurate report. Ken knows that revenue has not improved and to project an increase in revenue is not acting diligently.Professional Behaviour (s. 115requires that accountants’ actions do not bring discredit to the profession. Ken may breach professional behaviour if he prepares an inaccurate cash flow report. The boardwould soon become aware of the overestimated revenue once the monthly sales figures become available. The board would lose respect for Ken and the accounting profession.Module: 2Part: C2.10 The APESB Code of EthicsAPES 1100Page: 63Question 22Marks:Question:4 marks)Ken faces an ethical dilemma regarding the negotiations with the potential investor. Apply steps two2, three3and four4of the American Accounting Model to this dilemma. Step one1is providedbelow. Step 1. Determine the factsKen has been asked to overstate the revenue figures in the projected cash flow report.The board is considering selling 50 shares to an investor.If HS does notreach 90 per cent of its revenue targets, the existing shareholders will be required to sell their shares to the investor for half of their original cost.Please enter your written responses in the text box below. You can expand the text box by dragging the bottom right corner out.Your AnswerFirefoxabout:srcdoc13 of 1401/09/2022, 9:53 pm
Step 2Ethical issuesThe ethical issues that Ken has to address are the pressure from CEO to amend his projected cash flow to align with his strategic view of dramatic change for apositive outside which is different from Ken's views based on his initial assumptionsStep 3Norms, Principles and Values related to the caseStep 4Alternative Courses of ActionAnswer ExplanationStep 2Identify the ethical issues:2a: Who are the stakeholders?The board:If Ken provides the board with an inaccurate projected cash flow report, the board will not have all the facts in order to make an informed decision regarding the sale of shares to theprospective investor.The shareholders:If the board bases the decision on an inaccurate report, the shareholders will each lose half of their investment.The investor:The investor will be able to take over HS because it appears likely that the revenue will not reach 90 per cent of the target. The investor will have an unfair advantage because the board didnot have all the facts when making its decision.
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