Mia Simplot is reviewing the journal entries made by the accounting staff. As controller, her job is to make sure that the financial statements are accurate at the end of the month. She has received congratulations from the president of the company related to the preliminary revenue numbers for the month of August. To her dismay, she discovers that the August numbers appear to be incorrect. Several new accountants have been recording unearned revenue subscriptions as earned revenue. She knows that the president plans to have a staff meeting tomorrow to congratulate the staff of the increase in revenue. Mia is wondering if she should say anything or just let the numbers stay as is because it will be earned sometime in the future.

QUESTION 1: Restate the facts and identify the ethical dilemma. An ethical dilemma occurs when a company considers a decision about an accounting method or disclosure and that decision leads to different information being communicated to stakeholders.

QUESTION 2: Identify the following:

1. What stakeholders may benefit from the proposal/situation?

2. What stakeholders may be harmed by the proposal/situation?

QUESTION 3: Explain how the stakeholder is affected. Explain the accounting rules, principles, and standards related to the situation.

QUESTION 4: Identify all alternatives and discuss the impact of each alternative on the financial statements. Include the ones you would not recommend. Each alternative should be in a separate paragraph.

1. Identify the alternative methods available.

2. Discuss the effect of each alternative on the financial statements.

3. Identify which generally accepted accounting principle is adhered to or

   violated?

4. Evaluate the relevance and reliability of the alternatives.

QUESTION 5 :Provide your recommendation. Select the best alternative and provide supporting documentation for your decision.