Task

Content assessed: Professionalism & ethics in accounting and accounting history. Research, Key generic skills: critical thinking and written communication.

Question 1 - (1,000 words)

Angela Smith is the financial controller of a local manufacturing business, Printer Ltd. This is Angela's first job and she is presently in her probationary year. Printer is a medium sized organisation with around 80 employees and an annual turnover of $40 million, but has been suffering from the impacts of rising business loan interest rates. One of Angela's responsibilities is to prepare monthly management accounts which are then provided to Paul Davis, the Financial Director (FD) for his comment and review.

A few months ago, Angela noticed that the balance sheet position was slightly below the level required as part of the loan agreement which Printers' has with its bank. Angela informed Paul of this matter. Paul thanked Angela for her diligence but told her not to worry.

A few days later, a set of updated accounts were sent to the bank. Paul provided Angela with a copy of these accounts for her files. Angela noted that the inventory balance had been increased by $1.5 million. Without this adjustment Printer would have been in violation of its loan contract with the bank. While Angela respects Paul, she finds it surprising that such an adjustment was made, as she felt she was particularly thorough when recording the inventory valuations. Having thought about the matter for a few days, Angela decided to leave the issue alone.

At the end of the next quarter, similar events occur although this time the inventory adjustment had increased to $2 million. Angela approaches Paul and asks him why the adjustments were necessary. Paul tells Angela that there is inventory located at external sites which were not included in the original stock counts. Angela found this odd because Paul had never mentioned these 'external sites' before and the information would have been very important to a person in her position. Once again Angela decides not pursue the matter.

At the end of the next quarter things get even worse and Angela notifies Paul that Printer will breach its loan contract. Paul tells Angela to relax and a few days later she discovers that another set of accounts has been forwarded to the bank with an inventory adjustment of $4 million. Angela asks Paul to explain the inventory adjustments. Paul gets angry and says "you need to stop being a busybody and stay out of this, it concerns issues way above your pay grade. If you want to pass your next probationary interview you are best advised to fall into line".

Required:

a) What are the ethical issues facing Angela?

b) Recommend courses of action for Angela based on ethical egoism utilitarianism. Justify your and recommendations.

c) What might critics of teleological ethics say about Angela's courses of action identified in part b)?

d) Recommend a course of action for Angela based on deontological theory. Justify why this course of action is based on deontology.

Question 2 - (1,000 words maximum)

a) Define both the socially constructed view of accounting history and the socially constructing view of accounting history. Illustrate your answer with reference to key events from the history of accounting.

b) Which view of accounting history you think best explains the development of accounting in the 20th Century? Justify your position.

Rationale

This assignment has been designed to assess your ability to:

be able to explain the role of theory in the nature and development of accounting as a discipline (SLO1); evaluate ethical implications of theory in relation to current practice (SLO3); and be able to compare and contrast the diverse perspectives which can be used to explain the development of accounting theory including the impact of social change on accounting and vice versa (SLO4).

For this assessment you are required to use APA referencing to acknowledge the sources that you have used in preparing your assessment.