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Buster Container Company - Case Study Example

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Summary
In the paper “Buster Container Company” the author discusses the change in asset life suggested by the company’s president, which is extremely unethical. This is because material misrepresentation of the facts of a product has a potential effect of making the customers to make decisions…
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Buster Container Company
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Extract of sample "Buster Container Company"

DD Month YYYY ETHICAL ISSUES FOR COMPANIES The stakeholders for Buster Container Company are the shareholders. They virtually own the company as they have a share of the stock of the company. It is this ownership of shares that gives them the control that they exert on the company which is also dependent on the number of shares that a shareholder possesses. The higher the number of shares possessed by a shareholder, the higher the control he or she has and vice versa. The shareholders have both the potential to make profits or losses depending on how the company does.

The change in asset life suggested by the company’s president, Dennis Harwood, is extremely unethical. This is because material misrepresentation of the facts of a product has a potential effect of making the customers to make decisions to purchase the product, something that would not have happened had the facts been set right. Misrepresentation of information to customers is both an ethical issue as well as a tort that can attract civil liability (CCAB, 2011). The ethical issue arises as the company’s president is only driven by greed desires to keep up with the external competition that the company faces.

That is why he is keen on deliberating changing the estimated life of the company’s principal product, non-biodegradable plastic cartons, from 8 years to 12 years. He wants to do this to improve the profitability of the company while not putting the needs of the customers in mind. A potential ethical situation that can happen when dealing with bad debts is when the unethical accountants modify the financial registers of a company and scheme the numbers so as to generate a fabricated picture that the company is making profits (CCAB, 2011).

This can arise if the accountant in custody of the company’s financial statements and balance sheets is under unwarranted pressure and tension from the management who want to record a success of the company. This pressure makes the accountants to provide deceitful reports of the proceeds, possessions and liabilities of the company. This type of a fraud is responsible for short-term remunerations for the company’s but it can also lead to the ruin of the company once it is discovered by the relevant authorities (CCAB, 2011).

Work Cited CCAB, Ethical dilemmas case studies: Professional accountants in public practice. England: Consultative Committee of Accountancy Bodies, 2011.

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