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Sarah, the controller of a large beverage supplier, supervises two employees. Her boss, Vladimir, instructs her to increase the company’s inventory balance for an amount that is material to the financial statements by crediting several small “miscellaneous” expense accounts. She does not understand why he wants her to make these entries but immediately directs one of her staff to make them because she has been instructed to do so. Which of the following statements best describes Sarah’s actionsa)Sarah failed to evaluate a potenTal ethical issueb)Sarah failed to refer the ma²er to the AICPA ethics hotlinec)Sarah failed to ensure that her stu± was competent to make the entriesd)Sarah failed to consider the rules of the regulators

a) Sarah failed to evaluate a potential ethical issue Explanation: A financial fraud refers to misrepresentation of financial data by inflating or reducing a figure amount with the motive to deceive the users of the financial statements and thereby depict better financial position and state of affairs. The above concept is also referred to as window dressing of accounts. In the given case, the purpose behind increasing the value of inventory and creation of miscellaneous expense account is to depict fake financial picture. With an increase in the inventory balance, the profits would be inflated. Crediting miscellaneous expenses again would reduce expenses balances and further inflate the profits. Thus, Sarah failed to evaluate a potential ethical issue when she blindly directed her staff to incorporate such changes.

Sarah failed to evaluate a potential ethical issue. Explanation: From the question, we are informed that Sarah who is the controller of a large beverage supplier, supervises two employees and that her boss, Vladimir, told her to increase the company’s inventory balance for an amount that is material to the financial statements by crediting several small “miscellaneous” expense accounts. We are further told that Sarah does not know the reason behind this but told one of her staff to make them because she has been instructed to do so. We can see that Sarah failed to evaluate a potential ethical issue. She didn’t evaluate the effect of what she is doing. In this case, what her boss told her to do could be a case of fraud and she just obliged without asking questions which will put her conscience at ease in case anything happens but the fact that she just did it without asking questions or thinking if what she has done is morally right or wrong, it shows that Sarah failed to evaluate a potential ethical issue.

Sarah failed to evaluate a potential ethical issue
Explanation: According to the given scenario, Ethical concerns occur as workers face pressure from their employers to inflate profits or expenditures that include manipulating financial statements. Workers should be morally responsible and not participate in any dishonest behavior that modify the financial statements. So, the correct answer is Sarah failed to evaluate a potential ethical issue
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What our team says

Sarah, the controller of a large beverage supplier, supervises two employees. Her boss, Vladimir, instructs her to increase the company’s

Sarah is the controller of a large beverage supplier. Her boss, Vladimir, instructs her to increase the company’s profits by 20%. Sarah has two employees under her supervision, and she needs to figure out how to best increase their productivity. Sarah uses a computer program to scan the work that her employees have done over the past few weeks. The software teaches Sarah how to improve the productivity of her employees in three specific ways: 1) by training them on new processes; 2) by giving them new tools and equipment; and 3) by assigning them different tasks that match their strengths. The results of Sarah’s analysis show that her employees are highly productive when they are working on tasks that match their strengths. Sarah then assigns her employees to tasks that match their strengths, and they are highly productive as well.

Sarah’s Bio

Sarah is the controller for a large beverage supplier. Her boss, Vladimir, instructs her to increase the company’s profits. Sarah oversees two employees and must make sure that they are working efficiently and complies with all company policies.

The Job as Controller

Sarah is the controller for a large beverage supplier. Her boss, Vladimir, instructs her to increase the company’s profits. Sarah oversees two employees and must make sure that they are working efficiently and meeting set goals. She also has to keep track of expenses so that the company can remain profitable.

Vladimir’s Orders

Sarah, the controller of a large beverage supplier, supervises two employees. Her boss, Vladimir, instructs her to increase the company’s revenue by 10%. Sarah has been working in this position for three years and knows her way around the business.

She starts by reviewing the past sales figures and identifies that the company has been making sales decreases for the past few months. She also observes that the volume of sales is decreasing when compared to previous years. Sarah determines that there are several factors that could be contributing to this trend, but decides to focus on increasing spend within marketing and advertising efforts as they have had more success in the past.

Sarah begins to research new marketing and advertising strategies and evaluates their potential impact on revenue. She finds that increasing spending on these programs could generate an extra $10,000 in revenue per year. After making the necessary adjustments to her budget, Sarah gets to work implementing her new marketing initiatives.

Sarah Responds

Sarah responds to her boss Vladimir’s instruction to increase the company’s sales. First, Sarah evaluates the situation and determines that there are a few things that she can do to increase sales. She also looks into ways to improve inventory management and make sure that the products that are being sold are of the highest quality.

Conclusion

Sarah, the controller of a large beverage supplier, supervises two employees. Her boss, Vladimir, instructs her to increase the company’s profits by 20%. Sarah is not sure how to accomplish this and asks her colleagues for their help. They tell her that they do not have the knowledge or experience to help her and suggest she speak with someone who does. Sarah decides to look into hiring a Controller/Finance Manager and starts interviewing candidates. She is impressed with the skills and experience of one candidate, but is hesitant to offer him the job because he is foreign. Sarah decides to meet with Vladimir privately and explains her dilemma. He tells her that he will make sure the candidate gets an interview, even if it means taking on some extra work himself.