Question
Financial Accounting for Undergraduates Chapter 5 EYK5-7 - p. 266-267 EYK5-7. ACCOUNTING ETHICS CASE During the last week of 2017, George Green, controller of We
Financial Accounting for Undergraduates Chapter 5 EYK5-7 - p. 266-267
EYK5-7. ACCOUNTING ETHICS CASE
During the last week of 2017, George Green, controller of We "R" Appliances, received a memorandum from the firm's president, Jane Anderson. The memorandum stated that Anderson had negotiated a very large sale with a new customer and directed Green to see that the order was processed and the goods shipped before the end of the year. Anderson noted that she had to depart from the usual credit terms of n/30 and allow terms of n/60 to clinch the sale. Although the credit terms were unusual for the company, Green was particularly pleased with the news because business had been somewhat slow. The goods were shipped on December 29 and the sale was incorporated into the 2017 financial data.
It is now mid-February 2018, and two events have occurred recently that, together, cause concern for Green. First, he was inadvertently copied on a letter from the firm's bank to Anderson. The letter stated that the bank had reconsidered its decision to deny a loan to the company is now granting the loan based on the new, favorable, sales data supplied by the president. The bank was "particularly impressed with the sales improvement shown in December." Although Green had been involved in the initial loan application that was denied, he had been unaware that the president had reapplied for the loan.
The second event was that all of the goods shipped on December 29, 2017, to the new customer had just been returned.
Required
What are the ethical considerations George Green faces as a result of the recent years?
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