If we were in this position, we will not let our companys financial statements in
the hands of our brother-in-law since this would violate confidentiality. We would
also violate objectivity if we let him use the financial statements for personal
advantage.
b. You decided to record the purchase of new equipment as an expense rather
than depreciate the equipment because you dont want to take the time to
learn the new depreciation rules.
Answer:
This action is inappropriate since as accountants, we still need to be competent
in all areas of accounting. We need to be well-versed about the various methods
of accounting. Professional competence and due care is the standard to be
considered in this situation.
c. The sales manager, whose year-end bonus is determined by the companys
annual sales volume, asks you to record several sales invoices in December
even though the products will not be finished and shipped until January.
Answer:
This situation will violate integrity and objectivity. Integrity since we are not
honest in keeping the records for the month of December only. The situation will
also violate objectivity in which the sales manager used the alteration of records
and increase of sales to his personal advantage.
d. Dynamo, Inc. is planning to purchase new desktop computers for the entire
company. Days before the deal is to be finalized, a friend of yours who works
for the computer company tells you that his company is coming out with an
improved desktop in two months. If you relay this information to purchasing
department of Dynamo, Inc. your friend may lose his job.
Answer:
The information of improved desktops might be quite appealing, but if we
disclose this information to Dynamo, Inc., we will violate the standard regarding
confidentiality and objectivity. Confidentiality since we are an outside party in
which we shouldnt have known the information. Objectivity since we might use
the new information as personal advantage to buy the new set of desktop
computers.
MEMBERS:
Aniel, Sheryl
Fernandez, April Kate
Gelvero, Nessan
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Uy, Lovelle
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