Corporation Case - Ethics and Accounting

We have been asked for showing our believe in the unethical way of requesting by the CEO and CFO as the profit is expected to increase as well as the growing in producing goods. Our analysis use two production cost reports to explain our idea of how boosting the net income will be increased by the production, estimate how much profit we expect to increase reasonably. Based on our studies, we conclude that : increasing the desirable net income by increasing unethically number of production is an unadvisable way.

The rest of this memo explains the basis of our conclusions. We will present our analysis by 2 parts. The first part deals with the ethical standard of accounting about overproduction in order to increase profit. The next section is about the expected increasing profit under the change in number of production.

• Ethics and accounting :

Accounting must have a strong grounding in ethical and moral reasoning not just for individuals but also for corporations and entire nations. In an effort to help entities comply with business regulations and maintain financial reporting shareholders can trust there exist organizations . Primary among these are the Securities and Exchange Committee (SEC), the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).

In my opinion, business ethics must be the foundation of business. This forms the basis of trust that will attract and retain top talent, customers and suppliers. We must all work to put it in its proper place in business and government. To achieve the high net income without ethical issue, can bring us more profits in a short term, but probably it will end up collapsing our business in the long term.

• Expected profit in this issue

The estimated production cost report for the month of Junee under the normal production schedule

Barfield Siding

Production Report

For the year ended 30 June

Physical units Complete

Direct Material Complete

Direct Labour Complete

Manufacturing

Overhead Equivalent Units

Direct Material Direct Labour Manufacturing Overhead

Beginning WIP 260,000 100% 100% 100%

Units started in current period 230,000

Total units account for 490,000

Units completed and transferred 410,000 100% 100% 100% 410,000 410,000 410,000