Management Accounting in Company

Stakeholders A number of parties have stakes in this situation. The situation presents a financial decision which has a potential for causing a negative impact if it is known publicly and even if it is not known publicly, it may have financial consequences in the future.Advertising We will write a custom article sample on Management Accounting in Company specifically for you for only $16.05 $11/page Learn More Top management: In particular, the Chief Financial Officer (CFO) and the president are vulnerable to the Sarbanes-Oxley Act of 2002 (SOX) and furthermore, there are increased penalties for financial misconduct (Weygandt, Kimmel, Kieso, 2009). The controller, Wayne Terrago, is also a stakeholder under this category. Financial Community: This is the group that relies on the financial statements released by the company. The decision made is meant to hide the attention of the financial community from this expense. The financial community has the stake of ensuring that a company’s financial position is presented in the right and accurate manner. In this category are the following parties: Creditors: The decision made in this situation is meant to make the financial position of the company appear calm such that the bond offering process will not be jeopardized. This is a manipulation of a situation to make it appealing to another party. The shareholders: Such practice as seen in this situation has the potential for negatively affecting the long term financial position of a company. Since the shareholders are the owners, the decision made in this situation may affect them in one or another way.Advertising Looking for article on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The others include the company employees, the company board of directors, government regulators, and company suppliers. Ethical Issues The ethical issues represented in this case study are as follows: Wrong application of General Accepted Accounting Principles (GAAP) in reporting the advertising costs on goods which are not moving at the expected rate. The decision made in this situation is unethical as it leads to a creation of a misleading financial statement. This is done with an aim of ensuring that a forthcoming bond offering process is successful. This generally is unethical as it represents a favourable financial position of the company but which is not true. References Grahame, S. (2005). Management Accounting – Decision Management. Financial Management, 1(2), 41. Weygandt, J, Kimmel, P Kieso, D. (2009). Managerial Accounting: Tools for Business Decision Making. Hoboken, NJ: John Willey Sons.Advertising We will write a custom article sample on Management Accounting in Company specifically for you for only $16.05 $11/page Learn More This article on Management Accounting in Company was written and submitted by user Tomas Robinson to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.