Posted: July 15th, 2015

CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING.

CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING.

ACT 2200 PROJECT: CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING
For the following real world accounting case, you will provide aCASE ANALYSISfrom the perspective of the Accountant that analyzes both the technical and ethical accounting issues present in thecase and proposes a solution based on these considerations.This is an INDIVIDUAL assignment to be completed on your own!BE SURE to read the INSTRUCTIONS below the case thoroughly, as they lay out exactly what is required.  Also, it is IMPERATIVE thatyou read the accompanyingRUBRIC, on which your project grade will be based, so that you understand theEXACT EXPECTATIONSset forth to achieve the HIGHEST GRADE POSSIBLE (the rightmost column gives maximum score expectations).

Keep in mind that I am looking for a WELL-WRITTEN, PROOFREAD, WELL-ORGANIZED, HIGH QUALITY report that shows a thorough understanding of the accounting issues faced.  The report has no specific length requirement as long as you are sure to address all considerations of case.  Also, be sure to turn it in with the COVERSHEET below!
CASE INFORMATION: COOPER CONSULTING CORPORATION
You are an accountant for the Fort Lauderdale regional office of Cooper Consulting Corporation. Richard Brown, your boss, is theoperating manager of this office. As the manager, his pay package includes a base salary, commissions, and a bonus when his region has net income in excess of the budgeted amount. Richard has been thrilled with the region’s very high profits to date this year and is already sure to receive his bonus based on the numbers as of the beginning of this December.
In the later part of December, the company performs a highly-valued consulting project for a client, at a price of $300,000. Although Cooper Consulting has already completed the project as of this December and has billed the client accordingly, cash payment from the client is not due until the following month. Therefore, the client has informed you that they will pay the invoice for the project when it is due in the middle of January of the following year.
Richard stops by your office as you are preparing year-end financial statements for this year. He explains that the company has done so well this year and has already achieved revenues in excess of the budgeted amounts before factoring in the major $300,000 project completed at the end of December. Therefore, he asks you to change the manner in which you are planning to account for the project. Originally, you had planned to record the revenue from the project in the current year, given that this is when the services were performed. But when Richard approaches you, he says, “Hey, we are receiving the money from the client for this project next year, so why not count it as revenue next year instead? I never did understand why you accountants are so picky about these things anyway. I’d like you to change the way you record this transaction. Instead, I want you to recognize the consulting revenue next year when we receive the cash. That will start us out very strong for next year, which is also the year we will both be reviewed for promotion. I also anticipate many additional personal expenditures with my sick mother moving in with us next month, and it would really help to know that I would already have a greater change at next year’s bonus if this big project starts us out right!” With that, he leaves your office.
You have been working for Richard for five years, and like everyone else in the office, you consider yourself lucky to work for such a supportive boss.Youunderstand his logic and feel great sympathy for his personal problems. You also understand the technical and ethical standards to uphold as an accountant. You must now decide and describe the appropriate course of action you will take in this situation, as detailed below.
Instructions:
Technical: In a thorough Case Analysis, first analyze the technical accounting issue here by identifying and explaining the effects of bothaccountingalternatives (the original way and the way proposed by Richard) on the overall Accounting Equation (on both specific accounts and on overall assets, liabilities, and stockholders’ equity) in the current year and next year. Second, explain the effects of both of these alternatives on the Income Statement and Balance Sheet (on specific accounts and on overall net income and on assets, liabilities, and stockholders’ equity) in the current year and next year. Third,explainhow these Income Statement and Balance Sheet effects of both alternatives would be perceived by specific financial statement users, being sure to address their specific uses and related perception effects.
Ethical: First, explain why or why not you, the Accountant in this case, are faced with an ethical dilemma, describing the nature of any internal conflict you may be facing and the difficulty you may have making a decision given the various factors involved.  Secondly, identify and explainall potential parties (including Richard and yourself) who could be impacted by your decision, and how these considerations affect your ethical dilemma.
Recommendation: Based on the above considerations, first recommend and justify the course of action you would take as the Accountant in this case based on your technical considerations. Second, recommend and justify your course of action based on the ethical considerations that led you to this decision.

YOU WILL BE GRADED USING THE FOLLOWING RUBRIC, SO BE SURE TO COMPLETE YOUR PROJECT ACCORDING TO THE FOLLOWING POINT GUIDELINES TO MAXIMIZE YOUR SCORE:

Name of Student:
Course: ACT 2200    Date:Summer 2015
Lead Professor: Litt
TITLE OF RUBRIC: Case in Technical and Ethical Issues of Accounting
LEARNING OUTCOME/S:  CC5: Recognize the impact of basic business transactions on accounts and financial statements;
CC 7. Demonstrate effective written communication using proper organization, structure, grammar, punctuation and spelling including the use of appropriate technologies; CC8.Recognize ethical issues in business.
PURPOSE: To utilize technical accounting knowledge and ethical considerations to critically assess a real world business scenario and generate an effective recommendation.
VALIDITY: Critical assessment and recommendations based on Generally Accepted Accounting Principles as promulgated by the Financial Accounting Standards Board; Ethical assessments based on AICPA’s Code of Professional Conduct; Writing criteria based on APA standards.
COMPANION REFERENCES: ACT 2200 Course Textbook; APA Style Manual

Earning maximum points in each box in ‘PROFICIENT’ column and / or
points in columns to the right of ‘PROFICIENT’ meets standard.
<<<<<<<<<< less quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . more quality >>>>>>>>>>
Performance Criteria    Missing
(0 points)    Developing
(2 points)    Proficient
(3.5 points)    Accomplished
(4 points)    Exemplary
(5 points)    Score
Analyze the effects of transaction alternatives on the Accounting Equation
(CC5)
Does not attempt to analyze the effects of either alternative on the Accounting Equation    Attempts but does not accurately analyze the effects of either alternative on the Accounting Equation    Analyzes the effects of each alternative on the Accounting Equation partially accurately OR accurately analyzes the effect of only one alternative on the Accounting Equation    Accurately analyzes the effects of both alternatives on the Accounting Equation, citing specific accounts OR overall effects on assets, liabilities, and stockholders’ equity    Accurately analyzes the effects of both alternatives on the Accounting Equation, citing specific accounts and overall effects on assets, liabilities, and stockholders’ equity
Analyze the effects of transactions alternatives on the Income Statement and Balance Sheet
(CC5)    Does not attempt to analyze the effects of either alternative on the Income Statement or Balance Sheet    Attempts but does not accurately analyze the effects of either alternative on the Income Statement and Balance Sheet    Analyzes the effects of each alternative on the Income Statement and/or Balance Sheet partially accurately OR accurately analyzes the effect of only one alternative on these statements    Accurately analyzes the general effects of both alternatives on the Income Statement and Balance Sheet.    Accurately analyzes the effects of both alternatives on the Income Statement and Balance Sheet, citing specific accounts and overall effects on net income and on assets, liabilities, and stockholders’ equity
Describe the effects of transactions on the perceptions of users of the Income Statement and Balance Sheet
(CC5)    Does not attempt to describe the effects of either alternative on the perceptions of financial statement users    Attempts but does not accurately describe the effects of either alternative on perceptions of financial statement users    Describes the effects of each alternative on the perceptions of users partially accurately OR accurately analyzes their perceptions based on only one alternative    Accurately describes the general effects of both alternatives on perceptions of financial statement user

s    Accurately describes the effects of both alternatives on perceptions of users, thoroughly describing each user and the manner in which their perceptions would be affected
Identify the ethical dilemma faced in a business situation
(CC8)    Does not recognize or acknowledge that an ethical dilemma exists in this case    Attempts but does not accurately identify the key ethical issues deriving the ethical dilemma faced in this case    Accurately identifies some key ethical issues deriving the ethical dilemma faced in this case    Accurately identifies the key ethical issues and ethical dilemma faced in this case, generally describing its nature    Accurately identifies the key ethical issues and ethical dilemma faced in this case, clearly and thoroughly explaining the conflict present and the difficulty of considerations to be made
Explain the potential effects of a decision on any parties who could be affected
(CC8)    Does not explain any potential effects on anyone who could be affected by the decision to be made in this case    Attempts but does not accurately explain the key potential effects on parties who could be affected by the decision to be made in this case    Accurately explains some key potential effects on parties who could be affected by the decision to be made in this case    Accurately explains the key potential effects on parties who could be affected by the decision to be made in this case, generally describing their nature    Accurately explains the key potential effects on parties who could be affected by the decision to be made in this case, clearly and thoroughly outlining the cause and effect relationships and related difficult considerations to be made

Recommends effective actions based on technical considerations
(CC5)

Does not recommend a course of action    Recommends but does not justify a course of action    Recommends and somewhat justifies a course of action based on technical considerations made    Recommends and thoroughly justifies a course of action based on technical considerations made    Recommends and comprehensively justifies recommended course of action based on technical considerations made

Recommends effective actions based on ethical considerations
(CC8)

Does not recommend a course of action    Recommends but does not justify a course of action    Recommends and somewhat justifies a course of action based on ethical considerations made    Recommends and thoroughly justifies a course of action based on ethical considerations made    Recommends and comprehensively justifies recommended course of action based on ethical considerations made

Writes at the baccalaureate level
(CC7)

Does not write coherently; does not use appropriate grammar or spelling
(numerous major errors).    Writes somewhat coherently; uses appropriate grammar or spelling sometimes
(several major errors).

Writes somewhat clearly and consistently;
coherently phrases sentences;
generally uses appropriate format, grammar, and punctuation
(a few major and  minor errors)
Generally writes clearly and consistently;
clearly phrases sentences;
generally uses appropriate format, grammar, and punctuation
(some minor errors)    Writes clearly and consistently throughout the document;
clearly phrases sentences that flow smoothly;
uses appropriate format, grammar, and punctuation, (very few minor or no errors)
CASE POINTS:
FINAL CASE GRADE (CASE POINTS/40):
Comments:
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