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