Ethical case Example

Essays on Ethical case Essay Mubark Company Affiliation: Are there any ethical issues that face Maryam Mohammed, the Chief Financial Officer of Mubark Company, as a result of the request made by the managing director, Mr. Rashid? By changing the transaction from a liability to revenue, the Chief Financial Officer (CFO) is compromising the integrity of the work. This is brought about by intimidation and fear of his employment but it is still ethically wrong. The compromise of the integrity will lead to creation of false statements of the company’s financial statement hence not only lying to the management but the employees and the public as well. The request has also led to creation of another ethical issue for the CFO leading to potential conflict with the fundamental principles of accounting. As the Chief Financial Officer, Maryam is supposed to comply with all the International Ethics Standards Board for Accountants (IESBA) and by complying with this request he will be breaking the ethical codes and hence could be held liable without any blame falling on Mr. Rashid (International Federation of Accountants, 2013). 2. Who are the stakeholders that are affected by the request made by Mr. Rashid? The money Mr. Rashid tells Maryam to put down as revenue belongs to the Gulf Water Company as well as Mubark Company. These two are the main stakeholders who will be affected if this ethical misconduct is unveiled. The Gulf Water Company is bound to lose its customers as well as potential customers due to the fraud being conducted by Mr. Rashid. The Gulf Water Company will also be affected negatively as they risk to not only losing their money but they are bound to lose the elevator service and hence have to use another sum of money to subcontract another elevator service company. The charities that benefit from the company as well as the shareholders and investors will be on losing end as well if this fraud is unraveled in future and they will lose their money in the long run. 3. Identify the alternative courses of action that Maryam Mohammed could consider? Mr. Rashid is only subcontracted to improve the profits and overall performance of the company and hence not an employee. Mr. Mohammed should take the issue and report it to the CEO of the organization. If he can get Mr. Rashid to ask the same of him under pretense of clarification and then record him, he can have proof of the allegations. He will save himself from liability of committing unethical behavior as well as protect the stakeholders mentioned above from the suffering they are bound to receive if he agrees to the issue. The other alternative is to refuse to do as told and continue handling the accounting as he has always done. Mr. Rashid cannot force him to act unethically and if this happens, he can ask for internal audit to verify his accounting practices. This will prevent the looming problem. 4. What action would you advise the Maryam to take? The best action in this case is for Mr. Mohammed to do nothing and take no action in regards to the advice Mr. Rashid provided to him. By so doing, he will avoid implicating himself and the company as well losing the little remaining money and business for the business. Taking this action will indicate that he is an honest man and is also ethical as he will have followed strictly the ethical codes which prevents him from engaging in such illegal and unethical activities. The relationship with the customer Gulf Water Company will remain cordial and might even lead to other companies contracting their services in future hence increasing their revenue and profit. The downside to taking this action is that Mr. Rashid might fabricate some lie to have Mr. Mohammed fired or suspended simply because he disobeyed his direct orders. 5. "Ethics are important in the accounting profession† Briefly discuss this statement in by addressing the following issues: a) The importance and the role of ethics in the accounting profession. Ethics ensure that the accountants and the others in the finance sector maintain objectivity. Objectivity means that these individuals are not selfish and do not take part in any egotistical behavior and in the process jeopardizing their work, the stakeholders and the company’s fortune. Other than objectivity, ethics ensure maintenance of professionalism for those in the finance sector. Resisting monetary temptations which are what forms the basis for the unethical behavior is a true test of professionalism. The other role of ethics is it avoids conflict of interests. b) Give examples of the accounting ethical standards that should be followed by the accountant The situation such as the one faced by Maryam is that of a conflict of interest where his job is on the line if he does not accept to the unethical situation. He should seek legal advice, act with sufficient expertise and finally consult with superiors (International Federation of Accountants, 2013). References International Federation of Accountants. (2013). Handbook of the Code of Ethics for Professional Accountants. New York: International Federation of Accountants.