Should Boudreau Lower her Estimate?

WGN Company

Should Boudreau Lower her Estimate?
Since it is clear that the amount in estimation is fairly soft, there is no need to lower the
estimate anymore. Because of the estimate, there will be an increase in the net profits by
$60,000, which is not necessarily the case. The situation presented in the company is
dishonesty in accounting. It is not appropriate for an individual to reduce the guaranteed cost of
$60,000 to abide by the net pay towards the accrual of $1,000,000 focus that will act as a reward.
Many ethical issues in accounting need to be considered. One of the
considerations is the divulgence standards of operation. The standard does not grant the
bookkeeper the ability to conceal the qualities and the figures by making a down payment
of the overall amount. Not adhering to the standards means there will be an exaggeration of the
gains. However, the company may exaggerate the gain, but in the long haul, that means they will
have to expand the tax assessment (Weygandt, 2013). Thus, the suggestion is that there is
damage in the expenditure of the WGN company, limitation to the expansion and delineation of
fraudulent acts. It will be very unethical for Boudreau to lower the assessments. They should be
no alterations in the net income in the compensation plan of any company.
What Ethical Issues is at Stake?
To gain the finance vice president and the other executive members of the company, they
are a modification of the fiscal figures. They are trying to make changes to the accounting
estimates so that there will be a misuse of the funds from the stakeholders. Jack Brickhouse and
Louise Boudreau complete the general population that operates in the organization because of
the inventive form of bookkeeping. However, Boudreau will have an endless supply of his
leadership. The organization and the international bookkeeping standards team will have to

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consider the manager responsible for their acts. According to the Institute of CPA, disciplinary
actions need to be taken against anyone found guilty of the set and universally accepted rules
(Paul, Jerry & Donald, 2015). The main concern of the management and plan for the bonus
payment is towards the shareholders’ interest. The financial statement should be clearly and
accurately stated and computed as it will provide a net income reflection of the company.
Would Anyone be Harmed by the Change Estimate?
The changes are likely to harm other people. There will be a reduction in the returns for
the shareholders by a total of $15,000. The amount is not fair as there is greed among the people
in executive management. If there is a reduction in warranty expense, the original estimate is
likely to be more accurate. The stakeholders are harmed since the company will pay the bonuses
that the managers did not earn. The company will be incurring more expenses for the bonuses.
The strategy is to use income that was not earned, and that can be considered fraudulent activity.
There is a need to have a plan on the way forwards while dealing with the estimates. The plan
should consider including an auditing process that will ensure there is clarity in all the estimates.
Is Brickhouse Acting Ethically?
Brickhouse is not acting ethically. There is a need for Brickhouse to make estimates of
accounting through complying with the accounting policies, which are generally accepted.
However, for Brick’s house’s gain, he is trying to make modifications to the estimate. A moral
issue is when a person or group of individuals will be confronted with a situation where their
ethical acts are put to the test. There is an examination of the standards and accessible decisions
that can be used to set correct choices. The situation in the company is being tested ethically.
Brickhouse is not adhering to any of the standards or making any ethical decision. Like any other
business globally, bookkeepers are equally faced with difficult situations where their adherence

WGN COMPNAY 4
to the standards of operation are tested (Choi et al., 2015). The company’s situation is perplexing,
and hard to make an informed decision, and different people will have a variation in opinion as
to whether Brickhouse is acting ethically. There is an exclusive expansion of moral conduct for
Brickhouse as they are occupied with the calling. Brickhouse is not following any of the
regulations that have been enacted by the code of ethics and conduct. The actions of Brickhouse
are unethical as the actions are self-centered and of self-interest.
There is no clear basis that is following proper accounting standards. One of the ways
through which they can mitigate the conflict of interest is avoidance. For instance, those elected
in the company’s various leadership positions may sell all the stocks that they own once they get
into office. They may also consider resigning from all the corporate boards or even more their
stocks to any special trust. The main focus is to remove conflict of interest among the leaders and
make them concentrate more on their leadership roles.

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References

Choi, W., Han, S., Jung, S., & Kang, T. (2015). CEO’s Operating Ability and the Association
Between Accruals and Future Cash Flows. Journal of Business Finance & Accounting,
42(5-6), 619-634.
Paul, D., Jerry, J., & Donald, E. (2015). Accounting Tools for Business Decision Making (6 th
ed.). Wiley.
Weygandt, J. (2013). Accounting Principles. 11 th ed. Hoboken: John Wiley & Sons.