It has been seven years since Terkper assumed the position of Director of Finance in Ambassador...

  

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It has been seven years since Terkper assumed the position of Director of Finance in Ambassador plc. Mr. Terkper is known for his firm and stern position on managing employees in the Finance department of the organization and even employees in other departments. Recently, the company introduced a new product, which is generating sales and cash tremendously. However, the increase in sales also aggravated the company's problem of cash shortages made or recorded by Cashiers. Consequently, Management resolved to employ an additional Cashier. Hannah, the cousin of Mr.Okantey, the Managing Director, was employed on a part-time basis as a Cashier. It is the policy of the company to recover cash shortages made by Cashiers by the end of the next working day. Over the years, Mr. Terkper has applied this policy to the letter without fear or favour. Hannah, since her employment as a Cashier, has made several cash shortages which have come to the attention of Mr. Terkper, the Finance Director and Mr. Okantey, the Managing Director. However, Hannah has never been asked to refund any of the cash shortages made so far. The financial statements for the year ended 31st December 2021 is being prepared and Mr. Okantey has instructed Mr. Terkper to write off the losses made by Hannah carried in the Walk-in-cash ledger. Required: (a) In accordance with the IFAC's code of ethics, assess THREE (3) possible fundamental ethical principles that might have been breached. (5 marks) (b) Recommend the possible actions that the Finance Director should take as a member of the Institute of Chartered Accountant, Ghana in dealing with this ethical dilemma. It has been seven years since Terkper assumed the position of Director of Finance in Ambassador plc. Mr. Terkper is known for his firm and stern position on managing employees in the Finance department of the organization and even employees in other departments. Recently, the company introduced a new product, which is generating sales and cash tremendously. However, the increase in sales also aggravated the company's problem of cash shortages made or recorded by Cashiers. Consequently, Management resolved to employ an additional Cashier. Hannah, the cousin of Mr.Okantey, the Managing Director, was employed on a part-time basis as a Cashier. It is the policy of the company to recover cash shortages made by Cashiers by the end of the next working day. Over the years, Mr. Terkper has applied this policy to the letter without fear or favour. Hannah, since her employment as a Cashier, has made several cash shortages which have come to the attention of Mr. Terkper, the Finance Director and Mr. Okantey, the Managing Director. However, Hannah has never been asked to refund any of the cash shortages made so far. The financial statements for the year ended 31st December 2021 is being prepared and Mr. Okantey has instructed Mr. Terkper to write off the losses made by Hannah carried in the Walk-in-cash ledger. Required: (a) In accordance with the IFAC's code of ethics, assess THREE (3) possible fundamental ethical principles that might have been breached. (5 marks) (b) Recommend the possible actions that the Finance Director should take as a member of the Institute of Chartered Accountant, Ghana in dealing with this ethical dilemma.

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a Possible Fundamental Ethical Principles that might have been breached 1 Integrity Integrity is one of the fundamental ethical principles that could have been breached in this situation Mr Terkper as ... View the full answer