In this case, if I was Rachael then I would take action against the misstatement of financial statement. In this case, two of the company’s largest customers had gone into liquidation as the company’s would not able to recover more than 10% of the debts. This situation was grossly inadequate the current allowance for doubtful debts and it was overstated the account receivable. Inadequate current bed debts and overstatement of accounts receivables has not considered while prepared balance sheet to maintain the quick ratio for the purpose of the loan agreement (Bond, 2009). If I was Rachael then I would not consider the point of Olle Twist (accountant of the business) and focused on provide the accurate information in the balance sheet. I would try to convince of Olle Twist to make appropriate changes in balance sheet to represent the appropriate bad debts and account receivables.
I would try to explain of Olle that misstatement of account receivables or inappropriate balance sheet is unethical aspects related to the business because it is duties of an accountant to provide the accurate financial information of the company’s stakeholders. I would try to convince of Olle to make sufficient change in the balance sheet and if it didn’t agreed of it then I would inform directors of the company about this misstatement of balance sheet (Pollock, 2013). I would communicate with the company’s directors and inform them about the misstatement of account receivables and inadequate current bad debts as well as tell them about the Olle Twist (accountant) unethical behavior (Jones, Parker and Ten Bos, 2005).
Bond, T. (2009) Standards and Ethics for Counselling in Action. UK: SAGE.
Jones, C., Parker, M and Ten Bos, R (2005) For Business Ethics: A Critical Approach. London: Routledge.
Pollock, J. (2013) Ethical Dilemmas and Decisions in Criminal Justice (8th ed.). USA: Cengage Learning.
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