Ethics in Accounting

Consider the following business scenario:

You are the accountant of Casey Computer Co., and you are aware of Casey's weak financial condition. Casey is close to signing a lucrative contract with Best Software Company that should secure its future. The controller of Casey Computer, Bill Schmidt, states that the company MUST report a profit this year in order for Best Software to sign the contract. Bill suggests, "Two companies have placed orders that are scheduled to be shipped January 7th, when production is completed. Let's record the goods as finished and bill the customers on December 31st so that we can show the profit from those orders in the current year."

Analyze the financial and ethical implications of how a transaction is recorded and address the following:

• Why is Schmidt taking this action?
• Is his action ethical?
• What is the overall effect on the net income for that year if the company follows Bill's suggestion?
• What advice would you give to the accountant? What will you do in this situation?

Write an analysis, including your answers to the above questions and the justification for your responses and identifying the parties that would benefit and the parties that could be harmed.

Submission Requirements:

Submit your response as a three-page Word document.

• Font: Arial, 12 point
• Line spacing: Double
• Use the APA citation format.