Research Ethics in Accounting and Steve Jones’ Case (Essay Sample)
Steven Jones was recording the transactions of his client, Canton Construction.. Numerous payments were listed for wages paid and therefore he was properly debiting the Wage Expense account and crediting Cash. Steve became concerned that if he kept debiting the Wage Expense account it would end up with a balance much higher than any of the other expense accounts. Accordingly, he began debiting other expense accounts for some of the wage payments and thus "spread the expenses around" to the other expense accounts. When he was done posting all the journal entries to the ledger accounts, he printed a trial balance. He saw that the Wage Expense debit balance was $32,000 and he total of all the other expense accounts was $26,000. Had he properly posted all the other expense accounts would have totaled $12,000. Steve reasoned that his actions provided for "more balanced" expense account totals and, regardless of his postings, the total expenses were still $58,000 so the overall net income would be the same.
Answer the following questions:
Were Steve's actions justified?
Do they cause any ethical concerns?
If you were the owner of Canton Construction, would you have a problem with that Steve did?
Ethics in Accounting; Steve Jones’ Case
Business owners are faced with very huge accounting decisions as they run their enterprises. Thecosts is one of these decisions; business owners are liable to making a decision on whether they will consider the cost as an expense or they will capitalize it. The end result is that the decision will have an impact on balance sheet. What this implies is that all the tactics in accounting must be within the legal framework.
Incorporating the above into Steve Jones’ case, it is clear that his actions are not justifiable. Despite the fact that in the end after ‘balancing’ out the expense accounts, the total expenses are still be the same, they will impact decision making negatively. It could also lead to troubles in finance.
There is always a reason as to why there are different expense accounts. The recordkeeping thus has to give a certain level of confidence to the business owners. According to Petryni, business owners want to be assured that their accounting professionals’ practices conform to the standards of the business, are straightforward and honest. Practices that are out of this are unethical. Steve Jones failed to conform to the standards of the business since the business requires that each expense is recorded in its respective account. His actions also depicted lack of straightforwardness and thus cause ethical concerns.
If I were the owner of Canton, I would definitely have a problem with Steve Jones. Being an owner means that the deci...
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