Free Case Study About Ethical Case
The stake holders in this context include the Gulf Company which requires an exchange of the cash for maintenance services. They stand a chance to lose if the money counted as a revenue is used to contribute to charities without a corrective mechanism to assure them that their service would be delivered. Furthermore, the workers who are supposed to offer the maintenance services are also at risk of delayed payments. This is because the funds would have been diverted for use in developing the image of the company rather than running its activities.
Maryam could opt to either ensure the revenue is fully reinvested into the businessin order to offset the balance and ensure the company does meets its primary expectations. On the other hand, she could as well opt to calculate the total expenditure needed to complete the maintenanceservices and separate it from the total income. The balance she would record it as the revenue received by the company. She could as well pull more financial resources from the savings account of the company or request for a short loan for the company to substitute the extra expenditures just to ensure they are capable of offering the necessary services.
Considering that the directive of the managing director is aimed at improving the status of the company which would result in higher revenue income, I would advise her to utilize the savings of the company to ensure they are capable of meeting the requirements from Gulf Company. This would tax the company but in the long run ensure more profits and reduced losses.
Observing ethics in the accounting profession helps keep the image of a company hence marketing it to the society. Furthermore, this creates trust from other employees in the company thereby ensuring a smooth operation.There are certain accounting standards that should be observed in all cases. For instance the expenditure should always be less than the income generated in order to realize a profit. This however can be balanced using other factors for instance in this case marketing done by the revenue generatedfrom Gulf Company which creates a positive perception from the customers attracting more investors in the long run.