Accounting Ethics

Accounting Ethics Problem Chapter 5:

The solution proposed by Doug is absolutely not legal. If Doug was to get caught, he would lose his government funding and would probably lose his business. Cooking the books is a completely unethical business practice, and any accountant should never be tempted to do such a thing. Having two sets of books is something that is glamorized in the movies, but in reality the business should be in serious jeopardy if any of the clients find out.

If the government found out that they were cheating the system, they would pull their business, the business would lose their grants, and the consequences would be fierce when the IRS gets involved. If any of the private customers or if an employee found out what was going on in the business they would have no option but to tell the upper management or go outside the company to report what is happening with the company. Everyone that knew what was happening with the books is at risk of losing their jobs, and possibly face jail time.

If after Tonya expresses her objections and Doug ignores them, Tonya has no choice but to tell upper management or to go outside of the company. She needs to make sure that she has documentation of what is happening, because she will need proof of what Doug is planning. If Doug does implement these actions, she will need to protect herself because if the government does catch what is happening, she does not want to be caught in the cross fire.

She needs to be careful because if she does not say anything and she gets caught she could be subject to lawsuits and termination or worse. Tonya needs to make sure that she covers her own bases so she doesn’t get caught in the middle of something that she doesn’t want to be in the middle of.