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(a) Michael Onipa, a Chartered Accountant, is under pressure from his employer to under declare sales for the year ended 2021 to save the
(a) Michael Onipa, a Chartered Accountant, is under pressure from his employer to under declare sales for the year ended 2021 to save the company from paying the due tax for the year. He has evaluated the threat to his professional obligations to comply with the fundamental principles of good ethical behavior, as significant. He has therefore considered safeguards to eliminate or reduce the threat to an acceptable level. Required: Discuss TWO (2) safeguards Michael Onipa could consider to either eliminate or reduce the threats to an acceptable level. (b) The directors of Pharma Ghana Ltd are very confident about the quality of the products that the company sells. Historically, the level of complaints received about product quality has been low. However, when calculating their warranty provision, they have over-estimated the number of items that will be returned as faulty. The directors believe that this is acceptable because it is important for financial statements to exhibit prudence. Required: Discuss the ethical issues raised by the treatment of the warranty provision.
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