The Lawn Boyz Lawn Service Inc. accountant, Joe Reese confirmed several payments for wages that he debited properly on the Wage Expense and putting Credit on Cash. On fear of ending up with a higher Wage Expense than other expense accounts, Joe decided to debit other expense accounts for some wage payments to spread the expense in different accounts. On printing the trial balance, Joe noticed a $42,000 balance on Wage Expense while other expenses were $26,000. Had Joe correctly posted al the incurred ages, the wage expense would read $54,000 while other expenses would be $14,000. According to Joe, the decision to post wage expenses on other expense accounts provided room for a more balanced expense account totals. However, irrespective of these postings, the total expense remained at $68,000, giving an overall net income to remain the same.
In my opinion, Joe’s actions are misplaced, and there is no proper justification for them ( Kassem, 2014) . Joe, being the company accountant, was supposed to conduct a transparent and proper posting and recording of his journal entries together with the respective amounts. Instead of showing a $54,000 wage expense as wage other expense, he only showed the, as $42,000 while increasing other expenses to $26,000.
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Joe has engaged in unethical conduct. The employer may begin suspecting his intentions for altering figures. The main unethical concern, especially bothering the business owner, would be that the accountant has under-reported and under-recorded on wage expenses and over-reporting on other expense accounts.
If I were Lawn Boyz Lawn Service Inc.'s owner, I would question Joe’s ability to balance the company books ( Glodstein, 2015) . Over recording and under-recording and reporting are known as accounting mischief, intended at confusing things and not being transparent. It could be a way of hiding the actual wages paid to the staff and avoid being straight forwards regarding the company expenses. This is a misappropriation of accounts. Joe could provide fake bills for the other bills, and as the owner, I would investigate every bill.
References
Glodstein, D. (2015). Occupational fraud: Misappropriation of assets by an employee. Journal of the International Academy for Case Studies , 21 (5), 81.
Kassem, R. (2014). Detecting asset misappropriation: a framework for external auditors. International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE) , 10 (1).
