Financial Accounting Point Regarding Financial Crisis

Question: Describe about the Financial Accounting for Point Regarding Financial Crisis. Answer: Ethical Dilemma The ethical dilemma analyzed in the case study is that company has faced some volatility because of some current financial crisis and in the first meeting the agenda do not contain any point regarding that financial crisis (Ferrell Fraedrich,2015). Being a member of the Audit Committee, it is his responsibility; there should be proper disclosure of risk of a factor in the financial statement of the company. Being a member of the audit committee of the company, he also analyzed that in the future company can also have some promising debts. In addition to it, it also does not have scheduled quarterly compliance audit on the portfolio loan, which is very much necessary for the lenders as a performance reporting. Then further moving on to the case study, the matter has been reported and been asked for the explanation to the chairman of the audit committee for not including the issue in the report (Zadek et al., 2013). But the chairman of the committee says that the matters have been already discussed with the CEO, and he has advised for not raising the matter of the financial crises in the meeting which is to be held and not to disclose the matter to any other, specially to the lenders of the committee. Further to that CEO has also said that the company will not be signing the compliance of the loan audit. It is so, as the audit is at the request of debt provider and not the committee. Still, after getting explanations, the person from the audit committee is concerned that the providers of the debt will be assuming the lo an compliance are being taken into considerations by the audit committee. Then the statement is prepared according to that because it is known that the leaders of the company are dependent on the favorability of the audit compliance (Doherty Purtilo,2015). Major ethical dilemma involved in the Case study is, not the inclusion of the loan compliance by the audit committee. Audit committee is the one, on whom every is relying for the correct disclosure of the facts and figure of the company. The Audit people is very much responsible for the proper disclosure of the financial statement so they should properly analyze all the aspects and facts of the financial reporting and present the report true to the fact. Disclosure of the financial statement should be done truly because it is the only method for an investor for analyzing a company for investing. The inclusion of the debt portfolio and loan in the company will be depicting limitation in company's position, which may tell the lenders and the investor to the withdrawal of the investment from the company. The company having a large number of debts and loans depicts that company cannot give much return to the investors of the company shortly (Kuntz et al., 2013). The CEO is advising not t o show the loan and debt portfolio by the auditing committee so that the investor can remain in the business for the longer period. But the ethical point should also be considered in disclosing the statements. Due to the ethical dilemma in the organization, many other issues may arise. The ethical dilemma will also create many conflicting problems in the mind of the members of the company. The ethical dilemma creates conflicts in the mind of the people working in the organization. Ethical dilemma ignores the fact of the morality. Ethical points dilemma creates a point of value and morality in the organization. Ethical dilemma stops a member of the company in fulfilling his or her responsibilities and duties true to the fact with all the presence of all the morality in the act. Reference list Ferrell, O. C., Fraedrich, J. (2015).Business ethics: Ethical decision making cases. Nelson Education. Zadek, S., Evans, R., Pruzan, P. (2013).Building corporate accountability: Emerging practice in social and ethical accounting and auditing. Routledge. Doherty, R. F., Purtilo, R. B. (2015).Ethical dimensions in the health professions. Elsevier Health Sciences. Kuntz, J. R. C., Kuntz, J. R., Elenkov, D., Nabirukhina, A. (2013). Characterizing ethical cases: A cross-cultural investigation of individual differences, organisational climate, and leadership on ethical decision-making.Journal of Business Ethics,113(2), 317-331.