Abstract
I have been recently employed as Controller for Stanton Temperton Corporation. The company rents building spaces in major cities. In the company, clients are supposed to pay their rental fee six months in advance. At the end of this year’s financial calendar, the company’s head has noted a drop in revenues compared to the previous year. The decrease in returns worries the executive because it represents a reduction in profits (Thibodeau and Freier 162). Similarly, the condition may influence the stakeholders to sell their shares. The paper below indicates the ethical dilemmas I am currently facing following the order.
Ethical dilemma
Based on the above illustrations, it is apparent that I am facing many ethical dilemmas. I have to decide between obeying the president’s instructions and abiding by the required standards in my profession. If I fail to abide by the executive director, I may lose my job. Failure to follow his instructions will also result in a reduction in profits and key shareholders. On the other hand, if I follow his directions the company will record an increase in profits. Through this, the president will receive a boost in his stock and hefty retirement plans.
The issue
The issue above arose after I was instructed by the company’s president to enter a transaction improperly. After a thorough analysis, the president has noted that there were balances of unearned revenue amounting to $120, 000. The balance represents expenses in advance for long-term clients. He wants the balances to be recognized as revenues earned in the year 2015. Accounting ethics necessitates that I should enter these balances as liabilities. By accepting to be paid six months in advance, the company has signed a legal contract with its customers to deliver on the conditions of the transactions. Therefore, these funds should be recognized as liabilities up to the time they will be earned. As a professional, the public relies on my accounting analysis to come up with decisions affecting their retirement, education, and major purchases. If I go against accounting ethics, I will jeopardize my career and the public trust.
Parties involved
The issue affects many parties. The problem affects the company’s stakeholders, customers, employees, the president, and my profession. If the firm records a drop in revenues this year, the stakeholders will see a weakness in the company’s performance. In such situations, they will sell their stock. The issue will also result in huge losses for the company. I will be affected because by agreeing to enter an appropriate transaction, I will jeopardize my career. My professional regulatory body may withdraw my accreditation if found guilty of committing the offense.
What factors to consider during the decision-making
During my decision-making process, I will deliberate on many aspects. I will consider if the directive breaches ethical behaviors. Because the directive contradicts the required accounting principles, I will review the consequences of abiding by the order. Equally, I will consider the repercussions of agreeing to the command. As such, I will deliberate on the effect of the directive on the company’s long-term revenues. Equally, I will consider the impact of the action on the customers and the shareholders. I will also consider being a whistleblower and report the matter to the relevant authorities. Before doing so, I will deliberate on the costs of reporting the issues.
Works Cited
Thibodeau, Jay and Deborah Freier. Auditing And Accounting Cases. New York: McGraw-Hill Irwin, 2011. Print.