You have recently been appointed as Junior Management Accountant in Department Alpha at the Armidale Clothes...
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You have recently been appointed as Junior Management Accountant in Department Alpha at the Armidale Clothes Sales Company (ACSC). You report to Taylor Francis, a highly demanding boss, who is entrusted by the company to manage and run the department. The company policies require management to demonstrate profitable operations and the management members' performance is measured strictly accordingly. You are also accountable for your work to the Head, Management Accountants. Senior management team members at ACSC are pushed to pursue high profits. In this pursuit, Taylor Francis, visits you in your office and orders you to record in the business books a revenue transaction of $349,000 on June 30, 2019. As per the details of the transaction, the revenue amount, already received by ACSC, pertained to a Xangiang Company's confirmed order for a shipment of completed goods to them, however, as per the signed contract between the companies, ACSC had to ship the completed consignment of completed goods July 7, 2019. You feel pressured from Taylor who, based on the firm and paid for order from Xangiang Company, is demanding you to formally record the transaction as revenue on June 30, 2019. Taylor tries to convince you saying that the recording of the transaction will help "our" division to meet the set performance target for the financial year ending June 30, 2019. Review the above case scenario in the context of the four CIMA codes of professional conduct discussed in the prescribed textbook and provide a response to each of the following questions: A. What ethical and professional responsibilities you must fulfill under the given circumstances in the light of each of the four CIMA codes? B. What steps (describe any four) you will take as management accountant to handle the situation if Taylor is adamant and is consistently pressurizing you to follow his directions? You have recently been appointed as Junior Management Accountant in Department Alpha at the Armidale Clothes Sales Company (ACSC). You report to Taylor Francis, a highly demanding boss, who is entrusted by the company to manage and run the department. The company policies require management to demonstrate profitable operations and the management members' performance is measured strictly accordingly. You are also accountable for your work to the Head, Management Accountants. Senior management team members at ACSC are pushed to pursue high profits. In this pursuit, Taylor Francis, visits you in your office and orders you to record in the business books a revenue transaction of $349,000 on June 30, 2019. As per the details of the transaction, the revenue amount, already received by ACSC, pertained to a Xangiang Company's confirmed order for a shipment of completed goods to them, however, as per the signed contract between the companies, ACSC had to ship the completed consignment of completed goods July 7, 2019. You feel pressured from Taylor who, based on the firm and paid for order from Xangiang Company, is demanding you to formally record the transaction as revenue on June 30, 2019. Taylor tries to convince you saying that the recording of the transaction will help "our" division to meet the set performance target for the financial year ending June 30, 2019. Review the above case scenario in the context of the four CIMA codes of professional conduct discussed in the prescribed textbook and provide a response to each of the following questions: A. What ethical and professional responsibilities you must fulfill under the given circumstances in the light of each of the four CIMA codes? B. What steps (describe any four) you will take as management accountant to handle the situation if Taylor is adamant and is consistently pressurizing you to follow his directions?
Expert Answer:
Answer rating: 100% (QA)
This case is all about recognition of revenue Revenue can be recognized before of after the exchange of goods depending on the recognition method used ... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
Posted Date:
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