Mary is an accountant at Electronics.com. The business was established by the owner, Sarah Clark. Her manager,

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Mary is an accountant at Electronics.com. The business was established by the owner, Sarah Clark. Her manager, Susan, is concerned that the profitability of the business has been declining. She is afraid the owner may implement cost reductions by terminating staff if profitability does not improve. Mary discovered that expenses have been understated by $50,000. The financial statements have been prepared for the purpose of borrowing additional cash from a financial institution. Mary informed the manager, Susan that the financial statements need to be corrected before being released to the financial institution. Susan stated that she did not want the financial statements changed because she thought that the financial institution would not support the business loan application if the real financial position of Electronics.com was known.

Required: Answer the following questions in the spaces provided below:

Who are the stakeholders in this situation? What are the ethical issues?

What would you do if you were Mary With reference to APES 110 Code of Ethics for Professional Accountants, discuss at least two relevant fundamental principles in this case.