Forum: Discussion 4: Revenue Recognition and Ethics FORUM DESCRIPTION this Discussion Board, you will be using the following ethical uation: Maria and Andy worked well together to organize the accounting system and records of a growing Health Maintenance Organization (HMO). Bob and Connie, the two top executives in the HMO, were tightly focused on company growth as it related to monthly and yearly revenue. Bob was also in charge of budget reports. Every month, Mara and Andy would compile financial statements which were reviewed by company officers and later reported in patient and employee newsletters. Oftentimes, sales would fall below Bob's original projections. At such times, Bob would rant and rave about the low patient revenue accruals and comment "that surely more most be accrued." Andy and Maria would often remark to each other "why don't we just book the budget," since that is essentially what they did every month after their initial financial figures were reviewed, at least in terms of sales. Although Andy and Maria realized that at year-end the auditors would not condone Bob's recording practices, they were still somewhat angry that "their" precise accounting system required monthly adjustments because of Bob and Connie's need to "look good to the board." Of course, when year-end came, the glowing financial news fell short of projections. Although the shortfall was not enough to raise the HMO rates, it did send a panic through the accounting department. This information was not reported directly to shareholders, but it was embarrassing to make the year-end adjustments while scrambling to uncover additional revenues and explain to coworkers whv monthly newsletters were incorrect. Of course, when year-end came, the glowing financial news fell short of projections. Although the shortfall was not enough to raise the HMO rates, it did send a panic through the accounting department. This information was not reported directly to shareholders, but it was embarrassing to make the year-end adjustments while scrambling to uncover additional revenues and explain to coworkers why monthly newsletters were incorrect. Original Post* Stance: Read through the ethical situation. For the Original Post Pou , you will answer the following questions: - To what extent are Maria and Andy responsible to take action to curtail the recording of budgeted sales? - To what extent are the auditors responsible for supporting better interim accruals of sales? - To what extent is there an obligation by the company to ensure that only correct data about financial results is recorded and disseminated? - Do Maria and Andy have a right to be able to approach their superiors about an issue like this without fear of reprisal? Explain. - Is whistleblowing, in general, an ethical practice or does it encourage betrayal and entrapment? Explain. NOTE: You will not be able to see any of your classmates' Original Posts* prior to posting your Original Post*. This better ensures that all Original Posts* are unique and adds a greater variety of responses for you to reply to on the Reply Post*. - To what extent are Maria and Andy responsible to take action to curtail the recording of budgeted sales? - To what extent are the auditors responsible for supporting better interim accruals of sales? - To what extent is there an obligation by the company to ensure that only correct data about financial results is recorded and disseminated? - Do Maria and Andy have a right to be able to approach their superiors about an issue like this without fear of reprisal? Explain. - Is whistleblowing, in general, an ethical practice or does it encourage betrayal and entrapment? Explain. NOTE: You will not be able to see any of your classmates' Original Posts* prior to posting your Original Post*. This better ensures that all Original Posts are unique and adds a greater variety of responses for you to reply to on the Reply Post*. Reply Post* Stance: When it is time to complete the Reply Post , you will need to read through your classmate's original thoughts. Find one Original Post" to reply to. You have the option of agreeing or disagreeing with your classmate's Original Post*. If you disagree, you must produce counter arguments to the point(s) made. If you agree, you must bring new arguments or points to the discussion to reinforce your classmate's stance in the Original Post*