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Objective of Tutorial:
At the end of this tutorial, students will
• Demonstrate understanding of the different uses and users of accounting information
• Demonstrate understanding of different ethical theories and apply these to a case study
Question 1 - Users
Different entities have different users of their accounting information. Find a company listed on the NZX
and a PBE, and complete the table below to answer each of the following sub-questions:
2.
3.
3.
Question 2 – Ethics & Integrity
Case Study
Paul Sarver is the accountant at an unlisted company (i.e. its shares are not traded on a stock exchange).
The company has just received a patent on a product that is expected to yield substantial profits in a year
or two. At the moment, however, the company is experiencing financial difficulties; and because of
inadequate cash flow, is on the verge of defaulting on its bank loan.
At the end of the most recent financial year, the company’s CEO instructed Sarver not to record several
invoices as accounts payable. Sarver objected since the invoices represented genuine liabilities (future
outgoings). However, the CEO insisted that the invoices not be recorded until after year-end, when the
bank loan was expected to be renewed. After several very strenuous objections – expressed to both the
CEO and other members of senior management – Sarver finally complied with the instructions.
Required
Using one of the theories of ethics outlined in lecture (consequentialism, deontology, virtue-ethics),
explain whether you think what Paul did was ethical or not.
Tutorial assignment
Write a paragraph in answer to Question 2. Hand it to your tutor at the START of your tutorial.