You are an assistant in the accounting department of Thunderduck Shoes, a small retailer. The company has a loan that requires the company to maintain a minimum cash balance of $75,000, as reported on its year-end balance sheet. The cash balance in the general ledger was $80,000 prior to recording payroll for salaries of $15,000 that were earned in the current month. Your supervisor says the only way Thunderduck Shoes can meet its loan requirement is to delay recording the December payroll journal entryl until January of the next year. This would be pretending as if the payroll checks were not issued until after year-end. You questioned whether this would be ethical. The supervisor’s reply was, “Well, we don't really have a choice. Either we do this, or we violate the terms of the loan agreement and possibly be forced to repay the loan immediately. That could put us out of business. Think of all the people who would lose their jobs! Just wait to record the December payroll journal entry until January —probably before many of our employees even get the checks we have written to them.” Required: Write a 1-2 page technical business memo addressed to your mentor at work discussing the ethical decision you must make. Be sure to consider and discuss the following questions. Which elements of the fraud triangle are present in this situation? Which type of fraud is in consideration? Who might suffer in the short term if you go along with your supervisor's request? What might happen in the future if you go along with the request this time? If you do not go along, who might suffer in the short term and what could be the long-term consequences? You want to be loyal to your supervisor but honest to others who rely on your work. As an accounting assistant, which of these concerns should be most important? Why? What alternative courses of action can you take? Which of these is “best” given the circumstances? Criteria: Your business memo should briefly summarize the issue to your mentor at the company that works in a different department. The memo should discuss in detail the ethical considerations as you make your decision. Be sure to use your own words to paraphrase the information. Business Memo Guidance: A business memo is a very common task at work for an accountant. It is similar in structure to an email but is a little more formal. Also you do not have to sign a memo like you do an email. The contact information instead is listed in the heading of the memo. Most business memos are single spaced and left aligned (paragraphs are not indented). There typically is a blank row left between each paragraph or section of the memo. Be sure to use formatting to make the memo easier for the reader. This may include using a title for each paragraph, bold, underline or italic as necessary. You can also include a bulleted or numbered list, as appropriate. Business memos must be concise and summarize the information in your own words. Do not just copy and paste from a website. Instead paraphrase the information. Be clear in addressing topics and include an introduction, body and conclusion. I highly recommend printing out the memo and proof reading it yourself before submitting. This is good practice for class and also in your career.

Ethical Writing Assignment
Student’s Name
Institution Affiliation  

Business Memo

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To: My Mentor
From: Accounts Assistant
Date: 3/2/2020
Subject: Ethical Dilemma
According to the loan requirement of the organization, the cash balance of our organization is below the minimum standards required by lenders. Concerning the mentioned scenario; I’m obliged to make an ethical decision regarding the suggestion of the supervisor requiring me to delay recording the December payroll journal entry until January of the following year. I presume that the scenario is a fraudulent representation consisting of some elements of the fraud triangle. The element of perceived pressure is depicted in the situation.Thunderduck Shoes Company is financially obliged to maintain a minimum cash balance of $75,000 in its year-end balance sheet. However, the cash balance in the general ledger of the organization is recorded as $80,000 before the record of payroll salaries amounting to $15,000.As well; the aspect of perceived opportunity is prevalent in the circumstance since the organization does not have reliable internal control. Ideally, this is because the supervisor agrees that the payroll records for the current month should be recorded in the next month. Rationalization is another element that is depicted in the scenario. The supervisor justifies the action by presuming that the delaying of patrol recording would help the firm to achieve the loan requirements.
I presume that the fraud in consideration is accounting fraud involving delayed recognition of expenses and it may result in both long term and short term consequences. I understand that if I act according to the supervisor’s request, I will violate the standards of accounting and professional values. Ideally, in the short term, the creditors of the firm will suffer since they will access falsified information. However, in the long run, the organization will suffer since it will face the penalties of violating the standards of the Generally Accepted Accounting Standards. Besides, as an employee, I will jeopardize my professional standards, and I may face serious consequences. According to GAAP, the failure to recognize the expenses in the current accounting period is a violation of the accounting principle(Craig, Smieliauskas and Amernic, 2014). Failure to comply with the supervisor’s request may threaten my job security and affect my relationship with the supervisor. Besides, it may affect the potentiality of the firm to access loans from a particular lender. Nonetheless, in the long term, the decision will save the firm from being sued of accounting fraud.
I believe that the most significant concern is being honest to those who rely on my work. Regarding the mentioned concern, stakeholders of the organization such as investors and lenders rely on financial and accounting information when making decisions to invest in the firm or offer financial loans (McBroom, 2019). Therefore they should gain access to true, accurate and quality accounting information. Moreover, I should not violate my professional standards of presenting accurate accounting information on the expense of my relationship with the supervisor.
I have two courses of alternatives to undertake in the given scenario. I can either comply with the supervisor’s request or decline the request. Given the current circumstances, I denote that the decline of the request is the best course of the alternative that I should undertake. The action is ethical, and it is in line with professional standard and regulations of the Generally Accepted Accounting Principles.

References
Craig, R., Smieliauskas, W., & Amernic, J. (2014). Assessing Conformity with Generally Accepted Accounting Principles Using Expert Accounting Witness Evidence and the Conceptual Framework. Australian Accounting Review, 24(3), 200–206. https://doi.org/10.1111/auar.12039
McBroom, M. M. (2019). Generally Accepted Accounting Principles (GAAP). Generally Accepted Accounting Principles (GAAP) — Research Starters Business, 1–5.

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