Peer replies should be a minimum of 130 words, include at least 1 direct question and add value to the discussion
STUDENT 1: Kenny
In this scenario, Juan’s actions bring into consideration his integrity and competence. Juan should have been avoiding apparent conflicts of interest. By taking a loan from a client, he created a conflict of interest for himself. Despite the client being his “friend” Juan should have known that it was unethical for him to borrow money from him. To make it worse he continued to borrow money when he needed to end the relationship.
In relation to competence, Juan should have communicated his professional limitations before he took a loan and then after when he was asked to sign off on numbers stating that Tony’s company was in good standing. Juan’s ability to perform his job in accordance with laws, regulations, and technical standards is also compromised since he is not following those things. By changing a few numbers and signing off on clean financial statements he is no longer performing his job to the best of his ability.
Juan could have removed himself from this situation by not asking a client of his for a loan in the first place. He put himself in a vulnerable position to start with and was unable to come through on the promise he made of repaying the loan. After having taken the loan, Juan could have come clean to his superiors and explained what was going on.
Not only is he responsible but so are they for reporting correct financial information. In regard to confidentiality, they have a responsibility to make sure their subordinates are doing the correct things and following standards. Explaining what happened would also save the headache of having inaccurate financial statements and the family finding out about the whole scheme as an aftereffect.
Miller-Nobles, T., Mattison, B., Matsumura, E. (2018) Horngren’s Accounting, 12th Edition. [Vitalsource] Retrieved from https://online.vitalsource.com/#/books/undefined/
STUDENT 2: Jessica
- Although the central character of this story worked in public accounting, please refer to the IMA Statement of Ethical Professional Practice and discuss which of those issues are reflected in this case.
The Institute of Management Accountants (IMA) has developed ethical standards in which managerial accountants are expected to uphold. According to our reading text, “The IMA standards remind us that society expects professional accountants to exhibit the highest level of ethical behavior” Miller-Nobles, 2018). The IMA Statement of Ethical Professional Practice standards include: Competence, Confidentiality, Integrity, and Credibility.
Competence is upholding the utmost professionalism in the workplace. Confidentiality is the withholding confidential information, and refraining from using it for unethical gain. Integrity is upholding honesty and performing duties in an ethical and professional manner. Credibility is communicating all pertinent information accordingly.
In the situation with Juan, he violated all the standards listed above. When Juan began mixing business relations with personal relations, competence (professionalism) went out the door and this was the beginning of his spiraling downslope. Juan violated confidentiality when he used confidential information for personal gain, the personal loan. Next, his integrity failed when altered a few number and signed off on “clean” financials for Tony. Lastly, Juan ultimately violated the credibility standard by violating the other three.
- Could Juan have removed himself from his situation? How?
Juan should have given it a second thought before deciding to befriend his client, Tony, and asking for a personal loan should have been out of the question. He created a lot of mess for himself. It is never a good idea to mix business relations with personal matters. Juan could have avoided losing his license and serving prison time by taking out a personal loan elsewhere.
Miller-Nobles, T. L. (2018). Horngren’s Accounting, 12th Edition. [VitalSource]. Retrieved from https://online.vitalsource.com/#/books/97801344871…
Last Updated on February 10, 2019 by EssayPro