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Ethical Reporting in Accounting Practices

This document discusses a scenario where an accountant, Justine, discovers evidence that marketing managers have been inflating their expense reports. The correct action for Justine to take, according to principles of ethical conduct, is to notify the controller of the accounting department.

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Kenneth Jao
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4 views2 pages

Ethical Reporting in Accounting Practices

This document discusses a scenario where an accountant, Justine, discovers evidence that marketing managers have been inflating their expense reports. The correct action for Justine to take, according to principles of ethical conduct, is to notify the controller of the accounting department.

Uploaded by

Kenneth Jao
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Question

May I ask for an explanation of the question for a better understanding. Thank you!

Justine is an accountant in the accounting department of Modern Industries, Inc. Justine has just discovered
evidence that some of the corporation's marketing managers have been wrongfully inflating their expense reports
in order to obtain higher reimbursements from the firm. According to the understanding and acceptance of the
basic principles and concepts of ethical conduct, what should Justine do upon discovering this evidence?

a. Notify the controller.


 
b. Notify the marketing managers involved.
 
c. Notify the president of the corporation.
 
d. Ignore the evidence because she is not part of the Marketing Department.

Expert Solution

 Step 1

Correct answer is option a. Notify the controller.

On discovering the evidences, it is the duty of Person J (accountant) to first inform the head of his
department who is the controller. A controller is at executive level who controls all the accounts and finance
related matters of the organization. They have the duty to maintain the process of accounts and finance in
control. 

 Step 2

Marketing managers should be informed about it by the accounts and finance manager or controller. 

President should not be directly reached for the unethical matter as to maintain ethical behavior is the duty
of department managers and human resource mangers firstly.

The accountant should not ignore the matter as it may lead to immoral behavior and violates ethical
principles of the organization. It would motivate other employees also to indulge in unethical activity; thus, it
should be reported immediately for the positive corporate culture.

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