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ACCOUNTANT
Name:
Institution Affiliation:
The requirement of the firm to recruit employees who are good qualification and that they meet the code of conducts as prescribed by the company is to increase the profitability level of the company and also to minimize supervision. The purpose of having aggressive employees is to ensure that the company does not need to use a lot of resources to motivate its employees, as long as they are motivated the company will be able to achieve its objective easily. The purpose of the company to allow each division to operate autonomously is so as to make decision making fast and that each division will own up for any wrong decision that they have made. For the purpose of auditing it is important to have an impartial party looking up at the financial records of the company so as to give a true figures and the status of the business. The purpose of having employees being remunerated on the basis of their performance is important in the sense that each employee has to put his best foot forward so as to ensure that they achieve or rather have enough effort that will earn then a good pay.
For the profitability of a company to increase or rather improve it is important to cut costs that will enable the department to perform under minimal cost so as to ensure that they have enough profits. The department has been able to realize profits because the head of the department focusses on rather important and necessary tools that will be important in running the department. The method of accounting which assumes that the goods bought are the first goods to be sold. This assumption works when the company or rather the department is involved in constant supply of goods (John, 2010). When the company cuts cost and the assumption works it therefore means that the department head has made a good decision on behalf of the department.
With the entry of a competitor in the market it calls for serious measures to be taken so as to be able to maintain the profitability of the company. The new entrant has come with ways of getting new customers and maintaining them, the drastic cutting of cost on the other hand is futile to the department, and Smith is left with no other decision than to make or take those drastic measures that will allow her department to look as making profit.
Since smith is concerned with her salary and bonus since they are paid on the basis of performance, she resorts to falsifying the books of account. The effect is that she has to alter with the assets of the company and this which are the inventory. The effect is that when the company will be assessing its balance sheet the details that are available in it may not be factual and thus misleads the directors of the company. When determining if a balance sheet has balances, the formula is Capital = Assets + Liability.
When the department which operates independently tampers with the details of the inventory then it therefore means that they need to make adjustments so as to make the balance sheet to balance. The effect is that the company will be operating at a loss since the salaries that will be paid to smith will be not be genuine as the company is not making sufficient profits. The thought that she had of making a short run-solution to the profit decline due to the stiff competition that they were facing is risky (Dickson, 2014). This is because as much as she had good motives of making the company to stay in business she will be held accountable for the missing details when an audit of the firm is done. An audit is done so as to show the true financial position of the company and to rectify any mischief that would be done by the accountants or heads of the company.
Since the company policy is based on the ethical standards of the employee, the acts of Smith therefore breach the standards that have been set by the company. Breaching a code of conduct is serious and cannot be justifiable however good the reasons might be. The likelihood of Smith losing her job is very high because she had breached the code of conducts for accountants and the trust which was bestowed upon her by the company.
Had she been an intelligent head as she was she ought to have reduced the price so as to conform to the price which had been set by the competitors. She ought not to have cooked the books so as to maintain her salaries and bonuses. This is because she can be even be charged for defrauding the company. Therefore she ought to have made a fair competition with their competitors so as to enable them to be more aggressive and come up with creative ways in which they could be bale to improve the sales. Since she had been employed with the belief that she was qualified and minimal supervision provided that she was competent enough.
Reference
Dickson, E. (2014). Concepts of Accounting. Cambridge University , 87-102.
John, H. (2010). Advanced Accounting. New York: Thomas & Hobbes.