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.

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Definitions:

Empirical

Formed from what has been seen or experienced instead of from theoretical knowledge or pure reasoning.

Behaviourist

A behaviourist is a psychologist who studies behavior based on the principles of learning and adaptation, emphasizing observable and measurable responses to environmental stimuli.

Influenced By Experiences

Being Influenced By Experiences refers to the way direct encounters or interactions shape one's attitudes, behaviors, and understanding of the world.

Self-reward

A process where individuals give themselves a reward or positive reinforcement upon achieving a goal or completing a task.