A Faulty Budget

Daniel worked in the accounting department of Lynchberg Manufacturing. Daniels was recently asked to prepare a sales budget for the year 2011. He conducted a thorough analysis and came out with projected sales of 250,000 units of product. That represents a 25 percent increase over 2010. But after some time he found that he had made some mistake in his report. The report had indirect effect on the demand and sales of the product and also the hiring of the employees. He was in making a decision to tell his superior authority about the mistake. But his friend suggested not telling as it may risk his job. After listening to him his decision got bias. But in my opinion an employee should immediately report and error when it is discovered. All employees, especially employees who are burdened with the task of making projections which may impact the future of the company must act with integrity. Small-business investors and leaders consistently rely on the ethical collection and delivery of financial information. “According to Mintz, “Integrity is a fundamental trait of character that enables a CPA to withstand client and competitive pressures that might otherwise lead to the subordination of judgment.”

The priority must be based on the professional responsibilities first rather than looking at the personal interest first. What if the mistake is caught and then there will be no job rather than except the mistake and tell the superior authority there might be chance that the superior authority might give a chance and u can save your job. Secondly In accounting, the public interest (i.e., investors and creditors) always must be placed ahead of the one's own self-interest or the interests of others, including a supervisor or client. (Steven M Mintz 2)”

The answer does not change whether it impacts other aspects of operations. Certainly, it is more important to report errors when those errors can impact the company. The integrity of the person making the projection affects the overall reputation and trustworthiness of the individual, the department and the firm as a whole. If the belief develops that a person is making poor projections or covering up errors, even small errors their future projections may be ignored or discounted due to this lack of integrity.

Employees may be hired or laid off due to Daniels projections. In fact those people hired to meet the expectant work load may leave other jobs in order to take a job that does not actually result in a long term. As if the sales don’t go up and the demands for the product don’t increase there would be no need to hire the extra employee. Secondly the increase in demand will indirectly increase the sales and the numbers in the financial report and