by Oftset PIU derap- Marc Jackson has recently been hired as a cost accountant acturing company that produces a line of offset printing presses and lithograph machines. During irst months on the job, Jackson discovered that Offset has been underapplying factory over Work-in-Process Inventory account, while overstating expenses through the General and Admin Expense account. This practice has been going on since the start of the company, which is in i year of operation. The effect in each year has been favorable, having a material impact on the tax position. No internal audit function exists at Offset, and the external auditors have not y the underapplied factory overhead. 3-6) co Prior to the sixth- year audit, Jackson had pointed out the practice and its effect to Mary Brown corporate controller, and had asked her to let him make the necessary adjustments. Brown directed i not to make the adjustments, but to wait until the external auditors had completed their work and what they uncovered The sixth-year audit has now been completed, and the external auditors have once again failed discover the underapplication of factory overhead. Jackson again asked Brown if he could makethe required adjustments and was again told not to make them. Jackson, however, believes that the adjs ments should be made and that the external auditors should be infornof the situation. Since there are no established policies at Offset Press Compfor resolving ethical conflict Jackson is considering one of the following three alternative course action: Follow Brown's directive and do nothing further Attempt to convince Brown to make the proper adjustments and to advise the external auditors of her actions. . Tell the Audi Committe of the Board of Directors about the problem and give them the a ate accounting data. by Oftset PIU derap- Marc Jackson has recently been hired as a cost accountant acturing company that produces a line of offset printing presses and lithograph machines. During irst months on the job, Jackson discovered that Offset has been underapplying factory over Work-in-Process Inventory account, while overstating expenses through the General and Admin Expense account. This practice has been going on since the start of the company, which is in i year of operation. The effect in each year has been favorable, having a material impact on the tax position. No internal audit function exists at Offset, and the external auditors have not y the underapplied factory overhead. 3-6) co Prior to the sixth- year audit, Jackson had pointed out the practice and its effect to Mary Brown corporate controller, and had asked her to let him make the necessary adjustments. Brown directed i not to make the adjustments, but to wait until the external auditors had completed their work and what they uncovered The sixth-year audit has now been completed, and the external auditors have once again failed discover the underapplication of factory overhead. Jackson again asked Brown if he could makethe required adjustments and was again told not to make them. Jackson, however, believes that the adjs ments should be made and that the external auditors should be infornof the situation. Since there are no established policies at Offset Press Compfor resolving ethical conflict Jackson is considering one of the following three alternative course action: Follow Brown's directive and do nothing further Attempt to convince Brown to make the proper adjustments and to advise the external auditors of her actions. . Tell the Audi Committe of the Board of Directors about the problem and give them the a ate accounting data