Answered: e company should purchase an expensive…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 1EB: Assume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting...

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REQUIREMENT: Ethical behaviour for managers and management accountants

Question

Asma is a junior management accountant at Flower Cloth Ltd. Asma is given the task of compiling a cost-benefit analysis report on whether the company should purchase an expensive new machine from Radi Ltd, where her brother is the new sales manager. Asma did not tell anyone in Flower Cloth about her brother’s new job. In preparing her report, Asma overstates the qualitative benefits and understates the costs associated with this new machine to help her brother make his first sales as the new sales manager.

Required:

Discuss why and how Asma has deviated from the standards of ethical conduct.

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