Ms Shah, is the accountant of Holden Co and an ACCA member. He is also the nephew of Holden Cos chairman, whose annual bonus is based on reported profit. Mr Shah proposed the following.

Inventory write-down

It had come to the attention of Holden Co that inventory which existed at the 31 December 20x7 year-end was damaged due to a collapsed roof in the warehouse. The roof had collapsed due to a cyclone that happened on 20 December 20x7. Mr Shah advised that the accounting treatment for this should be that, this information must be included in the notes in the financial statements only since users need to be made aware of the incident.

After the accountant proposed the above, an email was accidently circulated around the company stating that if the initiatives were implemented Mr Shah would receive 20% of any bonus paid to the chairman.

Question:

Discuss any ethical concerns that you may have regarding Mr Shahs behaviour.