Ethics case study

Instructions to students

1-      The assignment length should be up to 700 words

2-      The total marks assigned for this assignment is 10 marks.

3-      E-version of the assignment should be in a PDF format

4-      The assignment has been created using safe assign and similarity test will run after your submission.

5-      Plagiarism will be penalized according to the following policy:

Originality reports (Similarity levels):

Blow 25%                      acceptable and no actions are required.

Between 25% – 49%    penalty is required (20% of the given marks to be taken away)

Between 50% – 74 %   penalty is required (50% of the given marks to be taken away)

Between 75%-100%    penalty is required (100% of the given marks to be taken away) 

6-      Write the resources you used

Mubark Company is an elevator repair company located outside of Doha, Qatar. For the last two years, the company has recorded net losses due to a sharp decrease in customer demand. In an attempt to improve its financial performance, the company hired Mr. Rashid Salim as the managing director. Mr. Rashid was known in the community as a person who is well respected and cares deeply about his work. He has excellent experience in helping companies that report net losses improve their financial performance and become profitable again.

One of the first things that Mr. Rashid did was review the company’s financial records. He decided to meet with Maryam Mohammed, the company’s Chief Financial Officer. During the meeting which took place on December 22, 2014, Mr. Rashid said to Maryam: “I noticed that on December 1, 2014, we received QR 560,000 from Gulf Water Company in exchange for elevator maintenance services which we will provide for a period of 6 months. I also noticed that on the same date, you recorded this amount by a journal entry as a liability. However, if you read the contract carefully, you will notice that we were required to start providing services from December 2, 2014. I would like to kindly request you to correct your December 1 entry to show that we have earned revenue of QR 560,000. Finally, I would like to remind you that our company is going through a very difficult financial period and ignoring this QR 560,000 of revenue will hurt our company very badly.”

Maryam asked to study the request and to get back to Mr. Rashid in two days. Before the meeting was over, Mr. Rashid turned to Maryam and said: “I would like to tell you that our company contributes to charities and offers financial assistance to poor families in other countries. Your help in correcting the journal entry will certainly show that we are no longer a company that reports a net loss. Of course reporting positive net income this year will help us to succeed in the market. As you know this success will also benefit the community and poor people all over the world. I hope you can take this into account when you consider my request.”

Required:

1. Are there any ethical issues that face Maryam Mohammed, the Chief Financial Officer of Mubark Company, as a result of the request made by the managing director, Mr. Rashid?

(2 points)

1. Who are the stakeholders that are affected by the request made by Mr. Rashid.

(1 point)

1. Identify the alternative courses of action that Maryam Mohammed could consider?

(2 points)

1. What action would you advise the Maryam to take?

(2 points)

1.  “Ethics are important in the accounting profession” Briefly discuss this statement in by addressing the following issues:                               

–          The importance and the role of ethics in the accounting profession.

                                                                                                                         (1 point)

–          Give examples of the accounting ethical standards that should be followed by the accountant.

                                                                                                       (2 points)