Michael has just finished his CPA qualification and has been successful in obtaining employment at Amethyst Hotel Limited as the financial accountant. His position involves preparing monthly income statements for each hotel and presenting this to the board of directors, as well as supplying the bank with financial information. During his first week, Michael noticed the cashier, Wilson whispering to Paul, the Finance Director and secretly giving him a handful of cash which had come directly from the hotel takings. Michael spoke with Wilson and he said if anyone finds out they would both lose their jobs. Wilson also mentioned that Paul is using the money to gamble on the pokies. He said it doesn't really matter, as Paul always pays the company back when he has a big win. At the last board meeting, Michael presented the monthly results which included a big loss for a hotel which has a large mortgage with the bank. The directors were very concerned as to how this may affect the bank's ability to continue lending them cash. After the meeting, Paul instructed Michael to prepare a different Income statement for the bank, and increase the sales by $100,000. Michael thought this should be fine, because Paul is not only the Finance Director, but also acts as the external auditor for the group. So he should know the best practice to follow. In order to keep Michael's skills up to date, the company has sponsored Michael to attend the yearly CPA conference. This is a good chance for Michael to learn about the new accounting standards and also network and meet other professionals. Michael met up with another accountant, Jean who also works in the hospitality industry. After the conference they went out for a drink and started talking about some of their issues at work. Michael trusted Jean and told her how much money each hotel was making and how worried he was about the hotel that is making a loss. Jean was very understanding and gave him some advice. Required With reference to the facts of the above case study:

1. explain the ethical principles that will be breached, and

2. reflect upon possible courses of action Michael can take in this situation.

Answer rating: 100% (QA)

Answer 1 Ethical Principles that will be breached a Integrity Both Wilson and Paul are engaging in fraudulent activities by stealing money from the ho... View the full answer