Question
Read the following case study and answer the questions that follow: Case study: Malaika is a newly appointed registered professional accountant of Mombasa Limited, a
Read the following case study and answer the questions that follow: Case study: Malaika is a newly appointed registered professional accountant of Mombasa Limited, a company registered in South Africa that operates various hotels in all the nine provinces in South Africa. Mombasa Restaurants Limited claims that it deals with halaal products only. While going through the accounting files, Malaika came across some invoices that had highly inflated prices from one of the suppliers, Mr Collet, who is also one of the General Managers of Mombasa Restaurants Limited. Malaika also discovered some invoices from another supplier, Dragon Limited who sells non-halaal products and the products delivered to Mombasa Restaurants Limited by Dragon Limited were non-halaal products. When Malaika asked the Manager of Mombasa Restaurants Limited about these issues, she was told to keep quiet, or risk losing her job if she spills the beans. Malaika also discovered that one of the employees working for Mombasa Restaurants Limited is a daughter to the manager and on scrutinising payroll files, Malaika discovered that the daughter to the manager is paid more than any other employee in her department despite the fact that she does not have the required qualifications nor the required job experience. There are also three foreign nationals employed by the manager who do not have legal valid work permits and are paid less than minimum wage. Malaika also discovered some expired ingredients used by Mombasa Restaurants in preparing meals for its clients. When she asked the manager about this, the manager said that expired ingredients have never killed any of their clients and the restaurant has been using these expired ingredients for time immemorial without any problems. REQUIRED: Q.2.1 Name and explain the principle that Mombasa Restaurants is breaching by selling non-halaal products to halaal only consumers? (2) Q.2.2 Explain the importance of the principle you mentioned in Q.2.1 above to business. (3) Q.2.3 Identify any 10 ethical issues in the case study above. (10) Q.2.4 Briefly discuss how Malaika, as a professional accountant, should have responded to the issues you mentioned in Q.2.3 above. (5)
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