Read the following scenario.

Read the following scenario.
Answer the questions that follow. This will be a 2-3 page submission in a question and answer format (also in paragraph form). An introduction and conclusion is not required.
Refer back to your textbook for guidance on how to think through the scenario.
You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries.  In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories.  The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000.  The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance.
After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category.  This will change the required allowance for uncollectible accounts from $180,000 to $135,000. Tactfully, you ask the controller for an explanation for the change and he tells you “We need the extra income, the bottom line is too low.”
In a 2-3 page paper, discuss the following:
Consider what you have learned relative to ethics and financial reporting.
1) What is the rationale for the calculations/process used to estimate the $180,000 uncollectible allowance?
In this section, you want to refer back to chapter 9 in your textbook and review the process for determining the allowance for bad debt.  What is most important in getting started on this assignment is to make sure you first understand why companies use the allowance method for accounting for receivables. The focus is not on the calculation itself, but the rationale for using the allowance method in comparison with the direct write-off method. Why is accounting for uncollectible receivables necessary? How does the allowance method provide a more accurate reporting result?
2) How do you think the misstatement of funds will impact the income statement and balance sheet?
For this question, you want to discuss the potential impact on the financial statements. The allowance method will provide an estimate for bad debt expense, as well as estimate the balance for the allowance contra account to accounts receivable. How will the items affect the income and balance sheet? For example, how will changing the aging category data affect the accuracy and reliability of information reported? Will the balance sheet accounts be accurate if they are over/understated?  How will the over/understatement of expenses, for example, affect the income statement?
3) What is the ethical dilemma you face? What are the ethical considerations? Consider your options and responsibilities as assistant controller.
For this question, you want to think about certain ethical considerations such as GAAP violations, lack of integrity, employee trust, customer trust, etc. How will changing the numbers noted in the scenario impact the company based on these ethical considerations? Is the conduct of the controller appropriate? Why or why not? Refer to chapter 8 in your textbook to help you expand on this question.
4) Identify the key internal and external stakeholders. What are the negative impacts that can happen if you do not follow the instructions of your supervisor?
For this question, you want to discuss the key individuals that may be affected by the act of the controller if his instructions are not followed.  Who is mostly at risk?  What is the responsibility to the employees, customers, vendors, etc.? What could reporting a low bottom line mean for the company? Could the company’s financial survival be threatened? What could happen to the assistant controller if he/she does not comply with the supervisor’s request?
5) What are the potential consequences if you do comply with your supervisor’s instructions? Who will be negatively impacted?
For this question, you want to name potential individuals who may be negatively impacted if the assistant controller does follow the instructions of his supervisor and how they may be affected. Again, think about the stakeholders you identified in question 4. For example, how would this affect the company’s reputation? Are there other potential ethical and/or criminal violations?
Additional Requirements:
Use at least one (1) quality academic resource (in addition to your textbook) for this assignment.


Click Here To Download  

The post Read the following scenario. appeared first on AssignmentHub.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now