ACCTI10-Fall 2016 ETHICS CASE STUDY -PORM 2/4 The Canadian Cooling Company (Ccc) is located in Toronto, Canada air conditioning (AC) units. Recently, the company hired Mr. Adam as Chief Financial Officer CEO) realized that Mr. Michel Prior to the end of the 2015 financial year, Mr. Michel (the company's specific actions need to be taken in order to increase the company's p called Mr. Adam for an emergency meeting. The meeting has focused on two essential issues that needed to be resolved urgently The First Issue The issue has Michel said that "I do not have a strong accounting background. on the recording of salaries expenses for the month of December. Mr However, I noticed that you of not paying these expenses them soon because ot make sense have recorded the salaries of December as expenses despite to the employees till the end of the year. We do not even expect to pay we do not have enough cash at the moment. Therefore, this recording does n for me and I doubt if this treatment is consistent with the accounting princip remove December's salaries from the expenses for the benefit of the company. As you know the less the expenses we record, the higher our net income will be. Second iss The issue has focused on the method used to record freight costs when the ma CCC purchases terials from its suppliers. Mr. Michel said that some members of the board do not have an accounting background. They know that our company uses the perpetual inventory system, but the way we record freight costs does not make sense to them. They told me that the company should use an account called "Delivery expense" when purchases are made, especially when our company has to pay the freight cost of purchases, according to the agreement with our supplier. However, I will ask you to use the "inventory" account in the event that our company pays for freight costs. It is important to note that the use of the inventory account in such a case means that we do not need to record an expenses. As you know, the less the expenses we record, the higher our net income will be." Required: You should answer the following questions for each issue separately 1. After reviewing the two issues mentioned above, do you think that there is any ethical 2. Who are the stakeholders that are affected by the ethical problem (s) if any? (Provide 3. What are the alternative courses of action that could be taken to sort the problem (s) 4. What decision would you recommend that Mr problem(s) in the two issues? Please explain the ethical problem(s) if any? an answer only if you think there is an ethical problem) if any? (Provide an answer only if you think there is an ethical problem) any? (Provide an answer only if you think there is an ethical problem) . Adam to take to sort the problem (s) it