Acc 501 Ethics case Due: April 5, 2022 You are the accountant for the Fastway Company,...

 

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Acc 501 Ethics case Due: April 5, 2022 You are the accountant for the Fastway Company, a manufacturing firm in the heartland of the United States. Like other firms in the area, Fastway has experienced declining sales and growth. Trying to reverse these fortunes, the company has offered extended credit terms (up to 180 days) to customers, and even relaxed its credit policy by offering credit terms to customers who previously did not meet its credit criteria. As you privately predicted to top management, cash collections have gone down. In order to meet the next payroll you inform your supervisor that the company will need to get a line a credit with the bank. Your supervisor tells you to prepare the financial statements so they can go to the bank and get the line of credit. However, you are to first show the financial statements to your supervisor. You prepare the financial statements and present them to your supervisor. A short time later your supervisor is in your office asking you why the net realizable accounts receivable is so low? You respond that you have set the allowance for uncollectible accounts higher than the past to account for the change in credit policy. Your supervisor states that it is too high and notes that we don't know what the uncollectible amounts will be. He continues by saying that the bank might question all of the receivables, and may not allow us to borrow enough to meet payroll. You show your boss your analysis of accounts receivable based on collections over the past six months, and you specifically note that you used an uncollectible percentage that is a little bit less than what has proven to be uncollectible over these last six months. (You used a slightly better collection percentage because of your plans to increase calls to delinquent customers). Your boss states this is unacceptable. He orders you to again prepare the financial statements but using the old bad debt percentage, reasoning that we should use the old percentage until it is proven at year-end what we can and cannot collect. Required: Consider the ethical dilemma you are in. Assume you are a CPA. Answer the following: 1) Should you change the financial statements to reflect the supervisor's wishes? Support your answer by discussing two relevant Articles of the AICPA Code of Professional Conduct. 2) What are the pros and cons of this decision? Discuss two advantages and two disadvantages of the decision you choose. MacBook Pro Acc 501 Ethics case Due: April 5, 2022 You are the accountant for the Fastway Company, a manufacturing firm in the heartland of the United States. Like other firms in the area, Fastway has experienced declining sales and growth. Trying to reverse these fortunes, the company has offered extended credit terms (up to 180 days) to customers, and even relaxed its credit policy by offering credit terms to customers who previously did not meet its credit criteria. As you privately predicted to top management, cash collections have gone down. In order to meet the next payroll you inform your supervisor that the company will need to get a line a credit with the bank. Your supervisor tells you to prepare the financial statements so they can go to the bank and get the line of credit. However, you are to first show the financial statements to your supervisor. You prepare the financial statements and present them to your supervisor. A short time later your supervisor is in your office asking you why the net realizable accounts receivable is so low? You respond that you have set the allowance for uncollectible accounts higher than the past to account for the change in credit policy. Your supervisor states that it is too high and notes that we don't know what the uncollectible amounts will be. He continues by saying that the bank might question all of the receivables, and may not allow us to borrow enough to meet payroll. You show your boss your analysis of accounts receivable based on collections over the past six months, and you specifically note that you used an uncollectible percentage that is a little bit less than what has proven to be uncollectible over these last six months. (You used a slightly better collection percentage because of your plans to increase calls to delinquent customers). Your boss states this is unacceptable. He orders you to again prepare the financial statements but using the old bad debt percentage, reasoning that we should use the old percentage until it is proven at year-end what we can and cannot collect. Required: Consider the ethical dilemma you are in. Assume you are a CPA. Answer the following: 1) Should you change the financial statements to reflect the supervisor's wishes? Support your answer by discussing two relevant Articles of the AICPA Code of Professional Conduct. 2) What are the pros and cons of this decision? Discuss two advantages and two disadvantages of the decision you choose. MacBook Pro

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