Case study Essay Example | Topics and Well Written Essays - 1250 words - 19

Case study - Essay Example Lisa mate with Mr. Anderson the controller of acquired firm. She asked for several financial records from Mr. Anderson. Lisa has found some discrepancies into those records and wanted more details but unfortunately she did not get enough support. Here in this case identified ethical issue is improper way of managing accounting practices from the side of the acquired company. Here in this case Prestige Fragrance Company has intentionally and suspiciously inflated two accounts in their balance sheet. Those two accounts are â€Å"Other Assets† and â€Å"Other accrued liabilities†. Here in this case the acquired company has not given enough documents related with the other assets section. Review conducted by Lisa has categorically indicated that the acquired company has unethically capitalized marketing expenses. The organization has recorded marketing expenses as the asset. It should have been recorded in the expense section. It indicates that to inflate the financial situation Prestige Fragrance Company has intentionally used unethical accounting practices to create more value for the firm. It is a clear cut ethical breach from the side of Prestige Fragrance Company. The company has continued its unethical accoun ting practices in case of â€Å"Other accrued liabilities† also. When Lisa has asked for the all journal entries related with â€Å"Other accrued liabilities†, Mr. Anderson totally declined to give any details to Lisa. It further reinforces the presence of ethical issue. This attitude of Mr. Anderson has clearly indicated that, he wants to cover up something and for that reason only he is not willing to provide all the documents to Lisa. Hiding something from the finance manager of the parent company is also a clear cut ethical issue which is present in the current case. There are several stakeholders are related with the ethical issues. The whole accounting procedure is