Question

Nicole Martins is the controller at UMC Corp., a publicly-traded manufacturing company. Last year, UMC had annual sales revenue of $15 million. The first quarter of this year just ended, and Nicole needs to prepare a trial balance so she can prepare the quarterly financial statements. However, trial balance is out of balance by $750 (credits exceed debits).

Nicole is running out of time as the report is due today! Therefore, she decides to balance by plugging the $750 into the Equipment account. She chose the Equipment account because it has the largest account balance. Therefore, with the $750 added, it will be the least-misstated account.

Identify the stakeholders in the case.

Explain the ethical issues the case involves.

If you were Nicole, what would you do?

Respond to two or more of your classmates’ postings in any of the following ways:

Build on something your classmate said

Explain why and how you see things differently

Ask a probing or clarifying question

Share an insight from having read your classmate’s posting

Offer and support an opinion

Expand on your classmate’s posting.

Refer to the discussion grading rubric for more information on expectations of class discussions

Answer 1

Consider the following explanation

Step-by-step explanation:

The stakeholders are as follows:

1)Investors-shareholders

2)Regulatory bodies

3)Creditors and financial institutions

4)Employees

5)Customers etc.

6)Management

2)There is a mistatement in the accounts of the company due to such an adjustment.This is due to improper recording of the transactions of the company in some stage such as ledger posting or trial balance preparation.The accountant should have taken utmost care and attention while excercising their duties since the financil statements of the company represents its financial health and a variety of stakkeholders mentioed above rely upon it for their decision making.

Here ,since the amount is very low,it is not much material,but correct balancing of trial balance would only imply arithmethical accuracy.So checks must be made regarding other concepts such as principles applied and accounting policies followed.

3)I would have rechecked the work again with utmost care to identify the mistake and correct them,rather than providing wrong information. Also I may delegate the checking to a qualified employee to review the same.