The Accounting Problem Faced By The Linbarger Company

Ethics in Accounting
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Ethics in Accounting
The Accounting Problem faced by the Linbarger Company
The Linbarger Company faces a major issue of financial management and planning in its operations. A critical analysis of the case study reveals that the company’s key stakeholders are well aware of the fact that the corporation has a financial commitment that makes it necessary for its cash account deficits to be maintained at a figure that is not less than $200,000. It is the obligation of the Linbarger Company to embrace proper managerial and fiscal planning policies to ensure that it effectively meets its monetary commitments without disrupting the operational efficiency of its partner organizations such as the insurance company under consideration. Proper financial planning and management in institutional settings inculcate pertinent ethical issues such as ensuring proper coordination and balancing of the business venture’s payments and receipts. It is only through the institutionalization of such operational mechanisms that indebted firms such as the Linbarger Company are able to meet their financial obligations without distorting the existing institutional ties. In this case, the organization needed to instill proper plans of adopting alternative sources of short-term funds at an advanced period in order to meet the agreement’s requirements.
Ethical Considerations
A critical analysis of the case study presented reveals the issue of timeliness as the underlying ethical consideration. there is need to put into consideration the fact that the ethical decisions adopted by the financial reporting agencies of an organization are basically formed by the underlying rules, policy frameworks, judgments, and contracts entered into by the firm. On the other hand, the ethical frameworks adopted by an organization play a significant role in informing its stakeholders the practices considered upright and those that are wrong. Putting the Linbarger Company into perspective, there is evidence that the corporation failed to meet its financial obligations in a timely manner. For instance, the company faces a financial commitment that obliges its stakeholders to ensure that it maintains its bank account balance at a figure that is above $200,000 by the close of every month.
The fact that the management of this organization fails to meet the commitments of this contracts at the stipulated time reveals its inadequacy in meeting the ethical requirement of timeliness. On the other hand, pertinent guiding principles such as the periodicity of accounting make it a requirement that the financial reports adopted by the organization must reveal higher degrees of uniformity particular when closing the books of accounts. A critical review of the case study presented clearly reveals that the company failed to meet this requirement. the fact that the Linbarger Company commits to the insurance company that it would incorporate the check to be deposited by Ocanto Distributors at a date later than 30th reveals great discrepancies in the firm’s abilit...