BA120 Assignment #2

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BA120 Assignment #2

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Scenario

Marcy recently started her first job after graduating from business school with her accounting degree. She is very excited to be working in her field and although she knows she still has a lot to learn, she already feels like she is getting a good feel for what it takes to be successful. She has been assigned to work under one of the senior accountants, Mrs. Bradlee, and so far, she has been easy to work with and very helpful. For the last several weeks Marcy has spent most of her time entering data into the firm’s computer system in preparation for the issuance of their clients’ annual reports. On Friday, as she is preparing to leave for the day her supervisor calls her into her office.
“Well, Marcy, still enjoying your work here with us?” Mrs. Bradlee asks.
“Oh, yes ma’am, very much. I know I am still new and have a great deal to learn, but I am very happy with my job,” Marcy replies.
“That’s good to hear, Marcy. We are all very happy that you are here and I think you will be a valuable asset to the firm. In fact, I have something that I would like for you to do for me. I understand you are available to work over the weekend, is that correct?” Mrs. Bradlee inquired.
“Yes, I am happy to come in over the weekend if you need me to!” Marcy replied.
“Excellent,” Mrs. Bradlee said as she pulled a folder from her desk drawer. Handing the folder to Marcy she continued, “we identified some errors in the data that was entered for the Dale account and I would consider it a personal favor if you could get these numbers corrected over the weekend. I have already taken the liberty of alerting building security, so you won’t need to worry about getting into the office. I don’t expect anyone else to be here, are you okay with being in the office alone?”
Marcy took the folder from Mrs. Bradlee’s outstretched hand and opened it to see what she had committed to. There were several pages of entries to be corrected, but Marcy breathed a sigh of relief when she realized that the work was not that different from what she had been doing for the last several weeks.
“Oh, I will be just fine. I should be able to get all of these corrections made in a few hours, ma’am.” Marcy said.
“Well, then, that’s that,” said Mrs. Bradlee, smiling at Marcy.
Taking that as her queue to leave, Marcy gathered up the folder and her belongings and headed towards the door. Just as she got to the door Mrs. Bradlee spoke again.
“Oh, and Marcy, I would appreciate it very much if you didn’t discuss this matter with your colleagues. It, ummm, might be an embarrassment to Mark Murphy. He made the original entries and I would hate for him to look bad in front of the other junior partners. You understand, I’m sure.” Mrs. Bradlee said.
“Of course, Mrs. Bradlee, I wouldn’t want Mr. Murphy to be put in a bad position. He has been very helpful and I really like him.” Marcy replied.
“Then it’s settled. If you just get these few minor corrections made over the weekend we will be back on track to get the Dale annual report out on time. And please make sure that you put in overtime for your hours. I will sign off on them personally on Monday morning.” Mrs. Bradlee said as she turned her attention to the stack of phone messages on her desk.
Marcy thanked Mrs. Bradlee for giving her the opportunity to be of assistance as she walked out of her office, pulling the door closed behind her.
On Saturday morning Marcy got dressed and was seated at her desk at 8am. As she waited for her computer to boot up, she began looking through the documents Mrs. Bradlee had given her the day before. There were several pages of entries that had to be made and it slowly dawned on Marcy that all of the entries had something in common – they either increased revenue or decreased an expense. Several of the entries re-classified long-term debt as capital improvements.
“Well, these entries will totally change the financial position of the company,” Marcy said to herself. “How could Mr. Murphy have made this many errors?” she thought. “Something about this isn’t right,” Marcie thought out loud. Slouching back in her chair she suddenly found herself liking her job and Mrs. Bradlee less than she did when she had gotten up that morning

Questions
1. Putting yourself in Marcy’s position, what do you do next? Consider the outcome of her various courses of action and the long-term effects of her actions.
2. What are the implications of the work Marcy has been asked to perform? Consider all of the stakeholders of accounting information when responding.
3. Why would someone in Mrs. Bradlee’s position ask an employee to perform this kind of task?

Explanation & AnswerSolution by a verified expert

1. Putting yourself in Marcy’s position, what do you do next? Consider the outcome of her various courses of action and the long-term effects of her actions.

Marcy is hopefully familiar with the AICPA’s Code of Professional Conduct. Once she goes through the four major steps, they will hopefully help prepare her to make the right decision. The first thing I would do if I were in Marcy’s position would be to contact Mrs. Bradlee to see if she is aware of the pattern of mistakes. If I had to wait for her response, I would try to copy and paste the file so I could make the changes while keeping the original. That way I could show my bosses what was given to me and what I did to correct it. It is so hard to say what the outcome of various courses would be, because of the lack of information. Did Mrs. Bradlee know that those types of mistakes were in there, and did she know if they were intended? She obviously wanted them fixed but didn’t want to do it herself. I would be asking her a lot of questions once I got a hold of her.

2. What are the implications of the work Marcy has been asked to perform? Consider all of the stakeholders of accounting information when responding.

Marcy was unknowingly asked to change the financial position of the Dale company. If she changes it, it could have a negative effect on a lot of the stakeholders of the Dale company who may be under the assumption that all those numbers are correct. However, if these mistakes were done on purpose, she is now aware of them and could be considered an accomplice if she does not act on her knowledge. So, not only could it hurt the Dale company and their stakeholders, but it can also have an effect on the company that Marcy is working for because it will be known that they are the company that allowed these mistakes to help the Dale company.

3. Why would someone in Mrs. Bradlee’s position ask an employee to perform this kind of task?

It seems like she knows that there is wrongdoing taking place, but she is too afraid to take care of it herself. I can only assume that Mrs. Bradlee asked an employee to perform this kind of task because then she can become a middle-man and can stay neutral if things turn sour on either end.

1. Putting yourself in Marcy’s position, what do you do next? Consider the outcome of her various courses of action and the long-term effects of her actions.
2. What are the implications of the work Marcy has been asked to perform? Consider all of the stakeholders of accounting information when responding.
3. Why would someone in Mrs. Bradlee’s position ask an employee to perform this kind of task?

1. This situation is not one that is easy. Mrs. Bradlee is basically asking her to change the entries to make the business look for more successful than it is. She only has two options. One of the options is that she brings this up to higher management and lets them know of this fraud that is being committed. The second option is for her to stay quiet and just perform the work she was asked for but it is against ethics. If she lets higher management know, she might end up losing her job because Mrs. Bradlee might not be so happy with her choice. If she stays quiet and just changes entries she will be going against ethics and in the long run, Mrs. Bradlee and her partners can blame her for the wrong entries and they end up not getting any lash back as a result, since they can either say that Marcy was new and it was a mistake or overall just blame Marcy. I would personally go to higher management and let them know what is being asked of me and explain to them why I think it is not a good thing to do.
2. The implications of the work Marcy has been asked to perform is that the company will look like they made a profit and the truth might be that they took a loss. As far as stakeholders, when you look into investing in a company, you want to make sure they are making a profit. Investors might purchase shares due to this fraudulent annual report and end up losing money due to the report not being accurate as to how much in debt the company is or what low profit they are bringing in.
3. Someone in Mrs. Bradlee’s position would ask an employee to perform this task because she is in a higher position she has more risks when it comes to doing things that go against ethics. If she were to do it herself she could lose not only her job but her accountant license. This is why she would ask someone in an entry level position to do this and ask them not to mention it to anybody.

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