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Chapter 16: Q14E_1 (page 889)

Making ethical decisions

Sue Peters is the controller at Vroom, a car dealership. Dale Miller recently has been hired as the bookkeeper. Dale wanted to attend a class in Excel spreadsheets, so Sue temporarily took over Dale鈥檚 duties, including overseeing a fund used for gas purchases before test drives. Sue found a shortage in the fund and confronted Dale when he returned to work. Dale admitted that he occasionally uses the fund to pay for his own gas. Sue estimated the shortage at $450.

Requirements 1. What should Sue Peters do?

Short Answer

Expert verified

Sue Peter, as the controller should supervise more carefully.

Step by step solution

01

Step-by-Step SolutionStep 1 Definition of Bookkeeper

A bookkeeper is defined as the individual who processes and records the larger volume of transactions of the business.

02

Sue Peter Should do

The new employees who have been engaged in such type of behavior will not become valued and the trusted employee of the company as this behavior is unethical.

As the controller of the company, Peter may have hired Dale, then she must be responsible for the lack of controls which led to the theft by the new employee.

Sue will need to supervise the next bookkeeper more carefully and should also check the background of the bookkeeper before hiring.

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Most popular questions from this chapter

Making ethical decisions

Sue Peters is the controller at Vroom, a car dealership. Dale Miller recently has been hired as the bookkeeper. Dale wanted to attend a class in Excel spreadsheets, so Sue temporarily took over Dale鈥檚 duties, including overseeing a fund used for gas purchases before test drives. Sue found a shortage in the fund and confronted Dale when he returned to work. Dale admitted that he occasionally uses the fund to pay for his own gas. Sue estimated the shortage at $450.

Requirements 2. Would you change your answer if Sue Peters was the one recently hired as controller and Dale Miller was a well-liked, long time employee who indicated he always eventually repaid the fund?

Identifying ethical standards

The Institute of Management Accountants鈥� Statement of Ethical Professional Practice requires managerial accountants to meet standards regarding competence, confidentiality, integrity, and credibility. Consider the following situations. Which standard(s) is(are) violated in each situation?

d. You failed to read the detailed specifications of a new accounting software package that you asked your company to purchase. After it is installed, you are surprised that it is incompatible with some of your company鈥檚 older accounting software.

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):

5. Summary reports prepared quarterly or annually.

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA): 1. Helps creditors make lending decisions

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):

4. Has a focus on the future.

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