Assume You Are the Managerial Accountant for a Publicly Held

question 9

Essay

Assume you are the managerial accountant for a publicly held corporation.Your supervisor is the controller,and he directs you to ignore a significant amount of obsolete inventory for a report you are preparing for the CFO.Your supervisor indicates that the inventory issue will just "mess up our projections because adjusting the inventory value downward will result in lower profits for the quarter.If it's obsolete now,it will be obsolete next quarter,and we have much more flexibility built into the budget next quarter."
Using the IMA's Statement of Ethical Professional Practice,what guidelines are violated and how should you handle this situation?

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Definitions:

Demographic Transition

Due to industrialization, a decline in the birthrate following a reduction in the death rate so that the population growth rate is lowered.

Birthrate

A measure of population growth or decline, calculated as the number of live births per 1,000 people per year.

Death Rate

The ratio of deaths in an area to the population of that area; usually expressed per 1000 individuals per year.

Carrying Capacity

The maximum population size of a biological species that can be sustained by a specific environment, given the food, habitat, water, and other necessities available in the environment.