Your company owes $40,000 to the Commonwealth Bank. The loan requires your company to maintain a current ratio (current assets divided by current liabilities) of 1.50 or higher. At present the company's ratio is 1.4. At this level you are in violation of your loan agreement. You can increase the current ratio to 1.53 by paying off some current liabilities right before end of year. Is this ethical to do so? What other issues might you need to be aware of in this situation?

Advanced Diploma of Accounting - Corporate Governance