When the IASB issues new standards, the implementation date is usually twelve months from the date of issuance, with early implementation encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in fair presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. What, if any, is the ethical issue involved in this case? Is the financial vice president acting improperly or immorally? What does Hoger have to gain by advocacy of early implementation? Who might be affected by the decision against early implementation

When the IASB issues new standards, the implementation date is usually twelve months from the date of issuance, with early implementation encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in fair presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. What, if any, is the ethical issue involved in this case? Is the financial vice president acting improperly or immorally? What does Hoger have to gain by advocacy of early implementation? Who might be affected by the decision against early implementation

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter8: Subprime Lending Fiasco-ethics Issues

Section: Chapter Questions

Problem 8.1EC

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Question When the FASB issues new standards, the implementation date is frequently 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fairer presentation of the Companyâ€™s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. Required: a. What, if any, ethical issue is involved in this case? b. Is the financial vice president acting improperly or immorally? c. What does Hoger have to gain by advocacy of early implementation? d. Who might be affected by the decision against early implementation? (CMA adapted)
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