You Have Recently Been Hired as the Assistant Controller for Clayton

question 68

Essay

You have recently been hired as the assistant controller for Clayton, Inc., a large, publicly held manufacturing company. Your immediate superior is the controller who, in turn, is responsible to the chief financial officer. The controller has assigned the task of preparing the year-end adjusting entry for bad debts to you. The allowance for uncollectibles accounts has a credit balance of $86,000 before the year-end adjustment. Your analysis indicates that an appropriate balance for the allowance account is $210,000. After showing your analysis to the controller, she tells you to adjust the allowance account to $310,000. Tactfully, you ask the controller for an explanation for the amount and she tells you, "We are having a really good year. Let's bump up the allowance."
Required:
Discuss the ethical dilemma you face. Consider your options and responsibilities along with the possible consequences of any action you might take.

Recognize the principles and structure of the private enterprise system and capitalism.

Understand the significance of labor inputs and the evolution of labor practices.

Grasp the historical impact of the Industrial Revolution on business practices and society.

Differentiate between for-profit and not-for-profit organizations and their operational priorities.

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Definitions:

Topographic Model

A Freudian psychological theory illustrating the conscious, preconscious, and unconscious layers of the mind.

Primary Process Thinking

A Freudian term describing the irrational and associative nature of the unconscious mind, often manifested in dreams.

Secondary Process Thinking

A rational, conscious thought process aimed at problem-solving, based on reality principle, in psychoanalytic theory.

Fixation

In psychology, a persistent focus or attachment to an object, concept, or stage of development, considered as a potential cause of psychological issues.