Argumentative Essay

ETHICS CASE

A business case

Presented to the

Accountancy Department

De La Salle University

In partial fulfilment

Of the course requirements

In ACTBAS1 C37

Lim, Sachelle F.

October 20, 2010

The stakeholders in the given case are Johnny Fuller, the owner and manager of the restaurant, Mary Lake, the accountant, and Johnny’s nine full-time employees and 16 part-time employees. All parties are considered stakeholders because all of them, even Johnny himself can be affected by the decisions he made for the business.

Regarding Johnny’s handling of his payroll, it is illegal not to withhold or pay any taxes or superannuation. Punishments for this violation may cause Johnny’s business and his employees’ jobs to end or imprisonment. Also, it is unethical that the wages of his part-time employees are not recorded and noticed. Though it costs him a little, recording of this information is vital to the formation of financial statements that would help him understand the current state of his restaurant.

Johnny should assign the task of the preparation of payroll and paying of payrolls to different individuals. In doing so, the task of preparing payrolls, recording of payrolls and preparing payroll tax returns would be different from the task of paying the employees.

Also, he told his competitor/friend, Steve Hill, owner of the Greasy Diner, that he is not paying taxes or superannuation. Johnny must have the idea that as his competitor, Steve Hill might sue his business so that Greasy Diner won’t have any competitors any more. Moreover, if this will not happen, Johnny might influence his friend Steve to not pay his business’ obligations and also be illegal. Before putting up a business, Johnny should be knowledgeable of some rules and laws that he should follow.

On the other hand, Mary Lake as Johnny Fuller’s accountant should be held responsible of what Johnny Fuller has done to his business. Since she knows the principles or rules of businesses, she...