Business Its Willing Creditors example essay topic

I. Introduction Ethical behavior should be observed in Accounting. It is the primary task of people who are involve in this profession to serve the public's interest and might even sacrifice personal advantages. It is just not right to fool the public since they have little knowledge in accounting information. It is also the duty of accountants to avoid being associated with misleading information.

Principles in AICPA's (American Institute of CPA's) code of professional conduct expressed its commitment of accountants to the public interest. These principles give emphasis on ethical behaviors that all accountants must follow in line with their performance of duties. These include principles like competence, confidentiality, integrity and objectivity. One must have competence to perform one's duty like providing relevant and reliable information that follows law, regulations and technical standards. Confidentiality is also needed so as not to use confidential information for one's own advantage and also refrain from revealing confidential information.

Integrity should be given importance by refusing to receive gifts and favors that might lead to conflict of interest. It also part of retaining one's integrity is by refusing to communicate biased information and by not joining to activities that could harm the reputation of one's profession. Lastly objectivity should be observed by communicating all information fairly and objectively, and reveal all relevant information. There are situations that these ethical behaviors are challenged. For example, if you are put in a company and you have discovered some irregularities in serving the public.

It is even more challenging if these regularities are accepted and tolerated by higher authorities and regard these matters as normal. The challenge will be put on you, whether to follow the steps that the company been observing or to take necessary action that might lead to sacrificing your own job. A specific situation will be the situation that will be analyzing for our business case. It is about Rita Pelzer job as a newly hired assistant treasurer of Yorkshire stores.

Her primary responsibility is to maintain the company's high credit rating by paying all bills when due and to take advantage of all cash discounts. The former assistant treasurer, Jamie Caterino, is training Rita in her new duties. He instructs Rita that she continue the practice of preparing all checks "net of discount" and dating the last day of discount period. But according to Jamie, they always hold the checks at least four days beyond the discount period before mailing them. In that way they can get four days of interest on their money. Most of their creditors need their business and don't complain.

And if someone complains about them missing the discount period, they blame it on the mail room or the post office. And he also believes that this kind of system is what everybody does. This business case is then an ethics case that would primarily focus on ethical considerations that are to be followed or violated. This would be a relevant study since we have gain knowledge on some accounting information. We can easily spot the irregularities being done. This business case is also relevant because the situation is not far from what is really happening in some companies.

It is unfortunate that the situation that we are presented in this business case is the trend that most company follow to fool the public for its own interest. II. Statement of the Problem Rita Pelzer was just hired as the assistant treasurer of Yorkshire Stores, a specialty chain store company consisting of nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Rita will manage. Her primary responsibility is to maintain the company's high credit rating by paying all the bills when due and to take advantage of all cash discounts. Jamie Caterino, the former assistant treasurer who has been promoted to treasurer, is training Rita in her new duties.

He instructs Rita that she is to continue the practice of preparing all checks "net of discount" and dating the checks the last day of the discount period. "But", Jamie continues, "we always hold the checks at least four days beyond the discount period before mailing them. That way we get another four days of interest on our money. Most of our creditors need our business and don't complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We " ve only lost one discount out of every hundred we take that way.

I think everybody does it. By the way, welcome to our team!" Questions: 1. What are the ethical considerations in this case? 2. Who are the stakeholders that are harmed or benefit ted in this situation? 3.

Should Rita continue the practice started by Jamie? Does she have any choice? Significant Issues to Consider First and foremost, integrity is deeply challenged. In ethical cases, the answer is mostly, if not all, based on the personal discretion of the person or party concerned, which implies that the power of decision-making entirely and solely relies on the individual. Ethical cases are problems that cause a struggle between the morals and the practicality of a given event -- -whether to let conscience rule and stop the workings of the business, at the expense of one's own job, or to rationalize one's shameful actions to keep the job -- -this calls upon the strength of integrity of the concerned party to give the final answer. And secondly, the nobility of the business concerned is questioned.

Although it is not written that a business must strive to earn respect and trust among its business associates and with the whole public, it is more or less an unwritten rule in the business world. It is very important for the business to gain nobility because it will cost the business its willing creditors and also good customers. If this is damaged or there is reason for any of the other party to doubt its credibility, then the business' reputation is at risk, and might very well mean a fatal stroke for the future of the business. IV.

Analysis and Course of Action If we are to point out the benefit ting and harmed party, naturally it would be Yorkshire Stores that is to benefit, particularly the department Rita is going to handle because with the four-day-delay tactic that they pull off, they earn extra interest while at the same time enjoy the discount offers of the creditors, and the creditors at a loss since the offered discounts are still retained when in fact, Yorkshire Stores is already past its discount period. But on a closer analysis, we may find the business at a position of disadvantage too. This is because the nobility of the business is ridiculed, as the consequence of such benefit. To begin with, it isn't a good excuse to push the blame on the mail because it is written on the mail when it was received by the post office, and so the creditors would know that it isn't really the mail's fault. Although it is said that the creditors don't complain, it is not surprising if the creditors would bear grudges and complain inwardly, plus through this discontented creditors, word will spread in the business field that Yorkshire Stores is an undesirable debtor, an dishonest opportunist, and a lot more of negative remarks that gives serious injury to the reputation of Yorkshire Stores. Also, it is more likely that creditors wouldn't place Yorkshire Stores in its priority list, and this presents another loss for the company, as its needs are withheld or even denied.

All these serious liabilities for the business is not simply worth it for just a few extra pennies earned by interest! By the way, what everybody does doesn't justify or lessen the sin the act carries... Considering Rita's dilemma, we believe that it would be best if she could find a way to discuss this ethical issue with her superiors in such a way that she would be allowed to change its system, that way she wouldn't have to sacrifice either her integrity or her job. If it couldn't be done and one must really take a pick, then it would wholly depend on Rita's own priorities to decide the final picture. If she finds that a clear conscience is more important than a job, and by disobeying it she would cause her own unhappiness with her work, then by all means refuse the work. If, on the other hand, she realizes that she can stand doing the work without guilt or that the job costs heavier than her own integrity, then there is no reason why she can't take the job and proceed with the old system.

Either way, she has a choice on how she will lead her own career, and also the company's future.