Accounting Question

Topic 6 DQ 2

Mar 14-18, 2024Review Case 9.32 in your textbook. Using the questions provided as a guide, explain what you would do if you were Amy in this situation.Participate in follow-up discussion by debating whether Amy should report Tony as indicated in part D of the case. Ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.Submitted on:Mar 14, 2024, 6:39 PMVIEW DQ RESPONSERCRufina ChukwuMar 15, 2024, 2:36 PMUnreadDr Duren/class,Based on the conservatism principle in accounting, possible losses must be anticipated and recognized or recorded. However, if there is uncertainty about future gains, it should not be recorded (Ahmed 2008) In this given case, If I were Amy, I would not roll out the improvements in her report that was told to do so by Tony. She is new at the company, but she has looked over her work twice, and on the second approach, she found “that the analysis obtained an even larger negative net present value” (Davis, 2020). She had strong doubts that the capital budget committee company would approve this purchase. Tony suggested that Amy should increase the useful life of the jet from 15 to 25 years, increase the salvage value by 25%, and increase the rental usage by 50%, but when Amy inquired with upper management, they requested a useful life of 15 years (Davis,2020). It seems Tony is trying to pressure Amy into signing the report and not helping. It would be her name on the report, not Tony’s. She could propose a secondary plan to upper management with Tony’s requests because according to IMA’s statement of ethical professional practice, IMA members have a responsibility to comply with and uphold the standards of confidence, integrity, confidentiality, and credibility. IMA members also must adhere to IMA’s principles – honesty, responsibility, objectivity, and fairness (IMA,2017) If any of these principles and standards are not followed, the analysts will be responsible for the violation, and cannot defend themselves saying that the management had forced them to do so. Amy should sign a report that is credible and honest. In case of pressure, Amy should send the unsigned report to the capital budget committee stating all the facts and findings mentioning the problems related to the report suggested by Tony and attach her true analysis in the report. As a licensed CPA and IMA member, Amy should not ignore the unethical behavior, rather she should report it to the upper management because her immediate supervisor Tony is involved in this. If no actions are taken, she can report it to the accounting state board and the IMA. References: Davis, C. E. & Davis, E. (2020). Managerial accounting. Wiley & Sons, Inc.Ahmed, N. (2008). Financial Accounting: A Simplified Approach. New Delhi, India: Atlantic Publishers & Distributors (P) LTD. https://www.accountingtools.com/articles/the-conservatism-principle.IMA. (2017). IMA statement of ethical professional practice