The ICAEW recently joined forces with IFAC to survey its students on their ethics. So how would you answer this ‘dilemma’?
Scenario: The CEO of a company requests that the controller reduce the estimate for bad debts in order to increase reported income, arguing that this is a common practice in the industry when times are hard. Historically, the company made very conservative allowances for doubtful accounts, even in bad years. The CEO’s request would make it one of the least conservative in the industry.
Action: The controller makes the adjustment.
Some of the Questions: Is this morally right?; Culturally acceptable?; Acceptable to my family?; What is the probability that I would undertake the same action?; The probability that my peers would undertake the same action?; The action above is? Answers on a postcard to IFAC please.
PQ Magazine 20/5/2010