Final answer:
Thomas violated the ethical principle of credibility by failing to disclose updated information that made an investment seem less profitable than initially thought.The correct answer is option a.
Step-by-step explanation:
In the scenario involving Daisy Inc., where Thomas, the cost accounting manager, refrained from disclosing updated and less favorable investment information to management, he violated the principle of credibility. Credibility in an accounting context includes responsibilities such as keeping all information up to date, providing all relevant information, and acting in a manner that stakeholders can rely on the accuracy and completeness of the information provided.
Thomas's initial calculations suggested that the investment in new equipment was profitable. However, upon realizing his assumptions were unrealistic, he chose to withhold this updated information, thus potentially misleading management and other stakeholders who are making decisions based on the data provided. This action is in direct conflict with the principle of credibility, which embodies not only the truthfulness of the information but also the obligation to update the information if and when it changes.
Thomas's decision affects the trust and reliability that management and other investors place in the financial data and investment analyses provided to them. Failing to disclose updated and critical financial data, even if it may have unfavorable consequences, breaches the ethical expectation of providing complete and accurate information necessary for informed decision-making. Therefore, based on the given information, the correct option is a. Credibility.