What is the accounting problem that the Linbarger Company faces?
The organization does not have books balanced yet it is at the end of the month. If the insurance company they owe money finds out that the books are not books are nit balanced the loan is likely to default.
What are the ethical considerations in this case? Provide rationale for why these are ethical considerations.
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Considerations, in this case, are if the assistant controller holds the cash book receipts open in order to overstate the cash balance it is unethical in accounting. The other unethical considerations are the use of receipts from one month to balance the books of another (Tracy, 2016) and the pursuance of the cash assistant by Lisa to commit fraud. It is illegal to do so.
What are the negative impacts that can happen if you do not follow Lisa Infante’s instructions to wait one more day to post the balance?
Negative impacts include default on loan agreement if the organization does not get the cash balance to $200000. Consequences of the loan defaulting could be closing down of the company hence the loss of jobs. Also, disobeying Lisa could be termed as insubordination of employees which could result in job loss.
Who will be negatively impacted if you do comply? Provide a rationale for why these individuals will be impacted.
The assistant would be negatively impacted if he complies with Lisa’s demands. Each person has a set of morals they live by. Breaking them and losing integrity would place the cash controller in a compromising situation. In the long run, they would be required to follow unethical requests in future and this could be bad for their career and reputation. If investors found out, they could possibly withdraw from the organization citing breach of contract and fraud. Stakeholders would begin to sell their shares and this would be blamed on the cash controller. In the worst-case scenario, a legal lawsuit would be filed against the cash controller for portraying unethical behavior (Mele, Rosanas & Fontrodana, 2017).
What is one alternative that you could pursue in this scenario? Support your recommendations with the information you learned in this class.
In this particular case, the only alternative is to practice utter honesty. The cash controller and Lisa should combine their thinking and arrive at a better solution other than cheating. The boss should be made aware of the problem so that he can result in alternatives like reserves that the organization can use in such a scenario.
References
Melé, D., Rosanas, J. M., & Fontrodona, J. (2017). Ethics in finance and accounting: Editorial introduction. Journal of Business Ethics , 140 (4), 609-613.
Tracy, J. A. (2016). Accounting for dummies . John Wiley & Sons.
