Review the information and questions below. Provide a detailed 45 sentence explanation on how you would solve
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Review the information and questions below. Provide a detailed 4−5 sentence explanation on how you would solve the problem or issue.
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Issue: Steve Waller is the corporate accounting manager for Giant Video Stores. As part of the budgeting process for the entire corporation, he has asked the manager of each video store to prepare a store master budget. The manager of one of the largest stores, Jeff Miller, decides to understate the sales budget and overstate all the budgets related to expenses. Jeff believes this is a more conservative approach than using the estimated numbers he honestly believes will be achieved for the year. He also thinks that the corporate office will look more favorably on his store's actual achievements when they are subsequently compared to this budget. Jeff has asked Lisa Dorton, his assistant manager, to review the budget before it is submitted. Lisa is aware of the real estimates that Jeff made. Questions to be Answered: 1) What is the impact of Jeff Miller's budget for the corporation? 2) What ethical issues face Lisa Dorton? Issue: Steve Waller is the corporate accounting manager for Giant Video Stores. As part of the budgeting process for the entire corporation, he has asked the manager of each video store to prepare a store master budget. The manager of one of the largest stores, Jeff Miller, decides to understate the sales budget and overstate all the budgets related to expenses. Jeff believes this is a more conservative approach than using the estimated numbers he honestly believes will be achieved for the year. He also thinks that the corporate office will look more favorably on his store's actual achievements when they are subsequently compared to this budget. Jeff has asked Lisa Dorton, his assistant manager, to review the budget before it is submitted. Lisa is aware of the real estimates that Jeff made. Questions to be Answered: 1) What is the impact of Jeff Miller's budget for the corporation? 2) What ethical issues face Lisa Dorton?
Expert Answer:
Answer rating: 100% (QA)
The impact of Jeff Millers budget for the corporation can be significant By understating the sales budget and overstating the budgets related to expenses Jeff is presenting a misleading picture of the ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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