You have been the manager of a local restaurant for the past five years. Because of increased competition, you notice you’re getting fewer customers. Despite all your attempts to attract new customers and cut costs, the restaurant’s profitability continues to decline. The restaurant owner tells you that if this year’s profit is lower than last year’s, you’ll lose your job.
When preparing financial statements at the end of the year, you
notice that this year’s profit is lower. You know that by
purposely understating certain expenses, you can falsely report
higher profits to the owner for this year. That will allow you to
keep your job for at least one more year and look for a new job in
the meantime.
REQUIREMENT 1:
What are the key issues?
REQUIREMENT 2:
What if you really believe the lower profitability is caused by factors outside your control? Would this make the false reporting acceptable?
REQUIREMENT 3:
What do you think is the correct thing to do?
answer 1 the key is sue here is that he istrying to decieve his boss by underststing the cost wich inturn would increase the profit . je couldd get into legal trouble with this . and it is not ethically right.
answer 2 even if this lower profitability is causedd by other factors that are outside his control it doent justify reporting false financial
answer 3 the correct thing is to tell employer that factores affecting cost are outside his area of purview it is not in his control .
You have been the manager of a local restaurant for the past five years. Because of...
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