Question
The board of directors of Xiaping trading company is meeting to discuss the past years results before releasing financial statements to the bank. The discussion
The board of directors of Xiaping trading company is meeting to discuss the past years results before releasing financial statements to the bank. The discussion includes this exchange:
Wai lee, company ower: " this has not been a good year! Revenue is down and expenses are way up. If we are not careful, we will report a loss for the third year in a row. I can temporarily transfer some land that I own into the companys name, and that will beef up our balance sheet. Brent, cant you shave $500000 from expenses? then we can probably get the bank loan that we need." Brent Ray, company chief accountant: Wai lee, you are asking too much. Generally accepted accounting principles are designed to keep this sort of things from happening."
1. what is the fundamental ethical issue in this situation?
2. How do the two suggestions of the company owner differ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started