Why would Green care about the level of budgeted net income?
Generally, net income acts as one of the most important measures of how an organization profits over a specific time, which makes it critical for Green to care about the level of budgeted income. As the director of the Southeast Region, paying attention to the level of budgeting income will ensure Green helps the region, particularly in the future, and the coming budget makes the organization more profitable. This goal will be achieved by ensuring the sales revenue minus operation costs or any other expenses have achieved a good ratio. The good ratio, in this case, will promote the ability of the company to avoid taking losses, thus resulting in more profit for the organization. Paying more attention to the level of budgeted income means Green can successfully ensure expenses are less than sales revenue, thus ensuring effectiveness and positive outcomes in consideration to the profitability of the company in his region. Besides, this will also have a positive impact, particularly in attracting more investors in the future. Green intention to open new stores and, most importantly, increase the pricing to four percent, particularly based on the fact that he lives in a low-cost region, means that it would be critical to ensure he focuses mainly on the level of budgeted net income (Nikitina et al. 2017). Generally, this plays a critical role in increasing his ability to achieve personal ambitions successfully and, most importantly, to reach the region’s target.
What do you think Mayfield’s reaction would be if she learned of Green’s actions?
Based on the rules and regulations of the company, I think Mayfield would not be satisfied because of his character of being manipulative, snoopy, and breaking the company’s rules. For instance, if Mayfield finds out that he can possibly be kicked out of the company, basically for having known his accountant Duvall tamper with the actual net income to reveal the total expense he wants to use to open ten new stores for his own.
What does Duvall have to gain from his actions? Does he have anything to lose?
According to Duvall, if he happens to find out Mayfield’s actions and behavior to the company, he will gain his job security because he knows very well that Green is well-known for bartering in contrast to his employees who turned back his request. Besides, Duvall also would have secured his wife a chance to own one of his new licensed stores.
Refer to the IMA’s Statement of Ethical Professional Practice in Exhibit 1-8. What responsibilities does Duvall have in this situation? Did he violate the Statement? If so, how?
IMA Statement of Ethical Professional Practice involved different and specific references in consideration of performing duties professionally and, most importantly, based on relevant technical standards, laws, and regulations. It also focuses on abstaining either in supporting or engaging in any activities that might have negative impacts on the profession (Shawver & Miller, 2018). Typically, the need for high ethics is of significant impact for most organizations. It helps in influencing positive performance and an organizational culture that supports organizations and their productivity. Generally, Duvall’s responsibility, in this case, includes creditability that ensures effectiveness in promoting proper communication and disclosing any important information related to the company. Duvall is also responsible for identifying any rights or wrongs and reporting them, particularly in situations where he has been asked to work unethically. However, Duvall violated the statement particularly by proving manipulated net income in consideration of Green’s desires and, most importantly, wants. This case means Duvall acted unethically, particularly on matters related to his responsibilities within the company and, most importantly, its general performance.
References
Nikitina, O. A., Litovskaya, Y. V., Savinkova, T. A., Zinoveva, E. G., & Ponomareva, O. S. (2017). The use of the budget planning mechanism in construction companies: evidence from LLC «STROYTEKHNOLOGIYA.» Espacios, 38(33), 17.
Shawver, T. J., & Miller, W. F. (2018). Accounting professional standards and implications for practice. In Giving Voice to Values in Accounting (pp. 91-95). Routledge.
Leave a Reply