Ethics Case BYP8-6
Ethics Case BYP8-6
Within organizations, internal controls are essential features that safeguard its assets and enhance the accuracy and reliability of the organizations accounting records. In addition, Congress forces companies to adhere and implement The Sarbanes-Oxley Act of 2002 (SOX). In this discussion, four questions will be addressed in regards to Ethics Case BYP8-6 and followed with ethical answers pertaining to the accounting industry. Who will suffer negative effects if you do not comply with Gena Schmitt’s instructions? Who will suffer if you do comply? What are the ethical considerations in this case? What alternatives do you have? As a result, accountants use internal controls to safeguard assets and maintain accurate accounting records. First, the assistant controller must evaluate their position and duties within the organization by following the principles of control. The establishment of responsibility in this case is Lisa Lucena, the assistant controller that is in charge of the general ledger accounting at Riverside Company, and Gena Schmitt, the financial vice president. As a result of any decision made by the assistant controller, will affect the assistant controller Lisa but not necessarily affect Gena Schmitt. Gena does not have the authority to keep the books open an extra day as there is no documentation that reflects the payment in the mail. This is against the SOX act, and grounds for unethical and criminal charges against the assistant controller. The acts that Gena is imposing onto the assistant controller can be considered approving fictitious invoices for payments to show money in the company account that isn’t actually there. If there was proper documentation, than the payment can be accurately documented as a payment in transit to the bank and journalized as accounts receivable $150,000 received on June 30. Also, Gena Schmitt does not account for the accounts receivables department. This is against...
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