The Main Standards of Ethical Behavior

This is a formal business memorandum to the Divisional President Mr. Ray regarding Butler’s company.

From: AAA

CC: Administration

Date: June 14, 2020

Subject: Butler’s Concerns Regarding Possible End-of-Year Behavior

As an experienced management accountant, I am writing this memo so that I can follow up. I’m here. Regarding Linda Butler’s concerns about actions to be taken. The memo looked at each concern and commented on whether it was acceptable or unacceptable based on ethical standards.

A.

This is acceptable only if the Independent Contractor does not undertake the work of maintenance within the current month of December. This is because there is not transaction to record unlike the case where independent contractor is allowed to work. The duty of ensuring that there is proper maintenance of the packaging equipment is bestowed with plant manager. This implies that the controller of the division has little to do apart from observing that there is no maintenance charge within the month of December.

B

It is unacceptable to extend the close of the current financial year beyond the required time which is December 31 in order to include sales of next year to the current one. By accounting standards, the company is required to close the fiscal year by December 31. Any act to end the closure will falsely report the sales for next year in the current year. Any false accounting constitute unethical conduct and it should be avoided because such move will misguide the concerned stakeholders such as the investors, the public, professional bodies and the authority among others (University of Minnesota, 2016).

C

The alternation of the date of shipping to indication sales for next January is an attempt to falsify the accounting information hence it is unacceptable. Ethically, Mihaylo Foods is supposed to adhere to the established accounting standards and report their true financial position as at the times the statements are prepared. Any other attempt to give contrary information is unethical and punishable by law.

D

This is acceptable because in most companies sales are greatly concentrated within the final weeks of financial year-end. In the event the double bonus is authorized by the marketing department, the other person’s inputs are not useful.

E

This is acceptable because it entails reducing consumption now and compensating of the same in the future. The point here is there is no misrepresentation of the facts or misstating key figures in order to present the company as profitable. This basically is reduction of expenses by opting to advertise more in the future when the economy is expected to improve and support that. The reduction of costs in December will be corresponding to a similar one in activities as a way of cost savings which is quite ethical (Santa Clara University, 2016).

F

This is quite unacceptable as advertisement run within December should be billed in this year to be charged. In the event the advertising agency agrees to defer the billing, it will be aiding falsification of the accounting records and hence acting unethically.

G

This is acceptable, though it depend the use of “persuading” carriers to accept the merchandise. For instances, in the event there is involvement of an under-the-table-payment or where carriers are persuaded to agree to a merchandise, it is quite unethical. However, in the event the carrier gets no extra consideration and on their own conviction accept this undertaking as they foresee better sales opportunity in the month of December, hence such transactions looks ethical (IMA, 2014).

In order to minimize chances of making unethical choices aimed at favoring individual stakeholders, it is important to involve all of them in decision making. This can be made through representation in which different departments are involved in the decision making organs. It is important to collect views of different stakeholders to have a common choice.

Corporate culture and ethics are positively related, they use the motto “Don’t be evil” to show how they are determined to follow their code of ethics. This is because both ensure that certain regulations are followed so that clients are treated in the most unbiased way. If Linda suspects that Ray wants her to take part in unethical conduct, she should first discuss the issue with him. She should escalate the matter to higher authority if she feels Ray not willing to discuss (University of Minnesota, 2016).

The corporate culture of Mihaylo Foods should include serving the users while bearing in mind ethics such as integrity, usefulness, upholding the privacy, security and freedom of expression of the user, being responsive by answering questions from users or provide solutions to the problems the users are likely to meet. Corporate culture and ethics are also related by ensuring that there is a respect which is attained through equal opportunity employment, providing safe workplace, avoiding conflicts of interests, preserving confidentiality (Rossreck, 2015).

In summation, ethics are necessary in determining what is wrong and right and play an important role as far organizations and corporate are concerned. Corporate culture and ethics also relate as they provide standards of behaving; culture also plays a role in determining ethical behavior. What is more is that, decision making is necessary in corporate world for the sake of achieving success.

References

IMA., (2014).Statement of Ethical Professional Practice. Retrieved from https://www.imanet.org/-/media/b6fbeeb74d964e6c9fe654c48456e61f.ashx

Rossreck., (2015). CASE STUDY: GOOGLE. Retrieved from http://rossreck.com/media/i/Google_CaseStudy.pdf

Santa Clara University., (2016). How do People and Organizations Inspire Trust? Retrieved from https://www.scu.edu/ethics/

University of Minnesota., (2016). Creating and Maintaining Organizational Culture. Retrieved from https://open.lib.umn.edu/principlesmanagement/chapter/8-5-creating-and-maintaining-organizational-culture-2/