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Cost Accounting

Essay by   •  November 13, 2012  •  Essay  •  488 Words (2 Pages)  •  1,636 Views

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1. Why might the snack-foods division president want to play the end-of-year games?

Nowadays, taking into consideration all factors having an influence on company's presence on the market, there are many features, which are not visible from the first sight, but they exist and contribute to a firm's success. As a result of development of technology and growing awareness of present customer, companies have to act carefully at all areas of activity. Not only does the contemporary consumer pay an attention to a product or service, which is interested in, but also the whole company and its inside, which offers these goods. The snack-food division president might want to play the end-of-year games because of the most important reason, which is achieving firm's success by showing only appealing and beneficial information. Beautifying the company's image is normal, very often seen economic activity. The balance law creates options of choosing solutions and leaves the field of free operation. With these capabilities, the company quickly and effectively achieve its objectives by appropriate shaping of the situation presented in the financial statements. This image is addressed to all stakeholders from the environment of the business with the intention to cause reactions, in their environment, conducive to achieve the company goals. The division president is aware of the fact that possibility of further firm's development depends on the perception of the company by third parties. The financial report is a showcase of the company, the presentation on the outdoor performance. Many companies are trying to make their financial statements look the best, and to make the person reading them have the best idea about the company and this is the task, Janet Taylor has to deal with.

2. The division controller is deeply troubled and reads the 'Standards of Ethical Conduct for Management Accountants' in Exhibit 1-7. Classify each of the end-of-year games as acceptable or unacceptable according to that document.

a) Acceptable: a, d, e, g

b) Unacceptable: c, f, b

3. What should Taylor do if Ryan suggests that end-of-year games are played in every division of Gourmet Foods and that she would greatly harm the snack-foods division if she does not play along and paint the rosiest picture possible of the division's results?

One may say this is the deadlocked situation when someone has to act unethically. In this case the way of solving that issue is to behave according to the standards of conduct which are to be respected by the management accountants. There is no perfect solution. The optimal way is to decide whether she wants to work at the department where she will be asked to play end-of-year games every single time or to decide to change the department or the company. The

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