Case Study of X Pty Ltd Financial Controller and Ethical Considerations

Sue  who  is a chartered  accountant is the financial  controller  of X Pty Ltd(X). The company  imports  and  distributes     one product only  and employs  21 people  including the owner Joseph. This  product is  imported  from Spain.

X has a history of profitability  and  stable growth. However  in the past 6 months  Sue  has been frustrated  with Joseph’s apparent  lack of interest in business. Customer complaints are increasing and  services levels are declining. As a result  sales have  started to fall for the first time since  the company  commenced  operations. Joseph  places  a great deal  of reliance  on Sue both for financial  expertise  and her  ability to keep things  on track  when Joseph is one of his   many overseas trip. One day Sue receives  a phone  call  from a friend Jackie. Jackie is also  in the import and distribution business although with   his  different product. Jackie advised Sue that she has recently had several meetings   with the manufacturers of the product  imported and distributed  by X… The manufacturers  are of the opinion  that  X can  no longer provide  the required  level of services  and  have decided to cancel  X;s contract  and award  the distribution rights  to Jackie’s  company

Answer the following questions: Identify  the relevant facts of  the above case study  to your role  as a financial controller  of X Pty Ltd. List  the four  key stakeholders affected  by the  above  case study,

With reference  to the  code of ethics  for professional  accountants  identify  the relevant  ethical  principles  that Sue should  consider in dealing  with this situation. Discuss how each  ethical  principle  you identify  applies  to the facts  of the case study. Set  your answer  out to part  as follows Ethical Principle  discuss how the principle applies  to the case study.

Explain  the consequences  of each  of the following  actions  that Sue could choose: Say nothing  or tell Joseph