CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING
Paper needs to hit all points on Rubric Grade Scale.
Instructions:
Technical: In a thorough Case Analysis, first analyze the technical accounting issue here by identifying and explaining the effects of both transaction alternatives (the original way and the way proposed by Hank) on the overall Accounting Equation (on both specific accounts and on overall assets, liabilities, and stockholders’ equity), and on both the Income Statement and Balance Sheet (on specific accounts and on overall net income and on assets, liabilities, and stockholders’ equity). Then, explain how these Income Statement and Balance Sheet effects of both alternatives would be perceived by specific financial statement users, being sure to address their specific uses and related perception effects.
Ethical: Then, explain why or why not you, the Accountant in this case, are faced with an ethical dilemma, describing the nature of any internal conflict you may be facing and the difficulty you may have making a decision given this conflict. Secondly, identify and explain any potential parties (including Hank and yourself) who could be impacted by your decision, and how these considerations affect your ethical dilemma.
Recommendation: Lastly, based on these considerations, recommend and justify the course of action you would take as the Accountant in this case, making sure you cite the specific technical and ethical considerations that led you to this decision.
