Q14E_2 - Horngren'S Financial And Managerial Accounting

Question

Making ethical decisions 

Sue Peters is the controller at Vroom, a car dealership. Dale Miller recently has been hired as the bookkeeper. Dale wanted to attend a class in Excel spreadsheets, so Sue temporarily took over Dale’s duties, including overseeing a fund used for gas purchases before test drives. Sue found a shortage in the fund and confronted Dale when he returned to work. Dale admitted that he occasionally uses the fund to pay for his own gas. Sue estimated the shortage at $450. 

Requirements 2. Would you change your answer if Sue Peters was the one recently hired as controller and Dale Miller was a well-liked, long time employee who indicated he always eventually repaid the fund?

Step-by-Step Solution

Answer

Sue Peter, as the controller should supervise more carefully, and other than she can also discuss this with the president.

Step-by-Step Solution Step 1 Definition of Ethics

Ethics are defined as specific rules and guidelines such as honesty, integrity, and morals.

Step 2 : Sue Peter Should do when there is a change in the situation

The new information will make the decision of Sue more complex. As Sue will be the new employee in the company, then she must want to discuss this with the president of the company, unless Sue can obtain additional information and indicate that this type of behavior by Dale will not be tolerated in the future. She must supervise and establish better controls.