The ability of any business to withstand challenges lies n the kind of financial reports produced at the end of every ledger period. Financial statement preparation looks at ethics owing to the business operation to ensure safe operation. Business should always consider ethics in their activities. In the case of Linebarger company, preparing the financial report with a balance of less than $200000 could result in its closure as that is against ethics of the loan the insurance company owes them (Zadek et al., 2013). In this case the company if facing the challenge of under accounting.
The ethical considerations in the scenario above are objectivity and independence, due care and integrity as expressed by Lisa. The rationale for the above factors is based on job protection and maintaining the company’s image.
If the company fails to follow Lisa’s advice, an adverse effect may arise the group may be termed bankrupt and in the same case result in the loss of job by the people working in the company. Failing to close books at the end of a financial period considering a given decisive factor is a health professional accountant ethical decision.
The consumers with being affected by this ethical decision assuming that no $150000 to be received because the company will work hard in all means to ensure that they have reached the target and resolved the problem before the end of the financial period. The employees may also suffer as some of the compensation and benefits the company gives may be taken off.
The alternative, in this case, is increasing the debtor side of the cash book with a value of more than $150000 or even getting another loan to increase liquid cash. Sale of assets like cars and land could be a solution to resolving the debt margin and covering the company from closure or being pronounced bankrupt (Hansen, Mowen & Guan, 2007).
Hansen, D., Mowen, M., & Guan, L. (2007). Cost management: accounting and control. Cengage Learning.
Zadek, S., Evans, R., & Pruzan, P. (2013). Building corporate accountability: Emerging practice in social and ethical accounting and auditing. Routledge.