Question One
In the case study provided, Carter and Ankara have conflicting ideas on the correct item to allocate the cost of purchase based on depreciation principles. Carter wants to minimize the firm's income tax and taxable income by assigning a high-cost proportion on the purchased warehouse. However, Ankara argues that Carter should consider the land's increasing value instead of the warehouse's depreciating cost. Ankara also contends that the firm's stock prices will decline because of its depreciation on net income.
In my opinion, the case study's ethical problem is the conflict on whether it is appropriate to ascertain the cost of allocation while considering the negative depreciation effect on net income. Additionally, there is an ethical dilemma on whether it is necessary to allocate the purchase cost between the building and land using the fair market value. Moreover, Carter is dishonest because he intends to provide inaccurate information that may potentially misguide stockholders and stockholders. Carter should give accurate financial information without needing to advance his interests. Thus, the ethical way of allocating costs should only be done after considering that cost allocation must accommodate the fair value ratio of the building and land ( Franklin, Graybeal, & Cooper, 2019). Cost allocation should also only be conducted after a professional has valued both the land and building. Moreover, the cost allocation should be based on the current market value computations. Thus, several factors must be considered before deciding on the correct item to allocate costs on.
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Question Two
The GSU's statement on integration of Faith contends that individuals should strive to further the good of the culture and the society. The ethical allocation of costs would benefit the community. It would provide factual information that would correctly influence stakeholders' decisions. Moreover, Tone's Company would have a positive image in society for upholding honesty. The reasonable allocation of costs would also benefit the culture of the firm. Employees would learn that the organization bases its dealings on morality and expects them to be honest while at the workplace and away from the job environment. Therefore, the decision to allocate costs ethically would benefit society and culture in unique ways.
Question Three
Christianity upholds ethics in the workplace based on commandments, consequences, and character. In the accounting workplace, the Bible has commands that accountants should adhere to for positive business outcomes. For instance, an accounting environment that uses some of the Ten Commandments for guidance will thrive because the commandments are grounded in solid morals. For example, the 7th Commandment states that "Thou shalt not steal" (Exodus 20:15, King James Version). Stealing is a common vice in the accounting workplace that causes distrust. Thus, when accountants desist from stealing, they uphold a culture of honesty in the workplace.
Christian values are also based on the consequences of people's actions. In the accounting workplace, a Christian worldview would dictate that there are consequences for every wrongful action ( Theology of Work, 2020) . For instance, the Bible states "Do not be deceived. God is not mocked, for whatever one sows, that he will reap also. For the one who sows to his own flesh reaps corruption, but the one who sows to the Spirit will from the Spirit reap eternal life" (Genesis 6:7-8, Holy Bible). Therefore, accountants should understand that when they violate GAAP accounting standards, they sow dishonesty, and the fruits are termination from work when the employer discovers their unethical conduct.
Finally, the accounting workplace may adopt the Christian teaching on good character as a success tool in the job environment. The Bible contends, "For nothing is hidden that will not become evident, nor anything secret that will not be known and come to light" (Luke 8:17). Therefore, accountants must always ethically conduct themselves.
References
Franklin, M., Graybeal, P., & Cooper, D. (2019). 68: Explain and apply depreciation methods to allocate capitalized costs. In Principles of Accounting, Volume 1: Financial Accounting [PDF Document] (1st ed.). Retrieved from https://opentextbc.ca/principlesofaccountingv1openstax/chapter/explain-and-apply-depreciation-methods-to-allocate-capitalized-costs/
Theology of Work. (2020). Ethics at work overview | Article | Theology of work. Retrieved from https://www.theologyofwork.org/key-topics/ethics
