Tommy Hubbs Is the New Controller of XYZ Corporation

question 28

Essay

Tommy Hubbs is the new controller of XYZ Corporation. Recently, Hubbs was approached by Carol Franks, the CFO, and told in no uncertain terms to record $100,000 in revenue at the end of 2015 even though the sale was not made until January 3, 2016. Describe Hubbs's ethical responsibilities in this matter if he is a CPA?

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Definitions:

Product

Anything that can be offered to a market that might satisfy a want or need, including physical goods, services, and experiences.

Period

A length of time during which a series of events or an action takes place or is completed.

Absorption Costing

A cost calculation method within accounting that assimilates all expenses incurred during manufacturing, covering direct materials, direct labor costs, and all overheads, whether fixed or variable, into the product’s price.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, detailing net profit or loss.